Seasonally-Adjusted Home Prices Declined in May

Home price gains continued to slow in May, posting smaller annual increases than In April the S&P Dow Jones Indices said today.  The Indices' Case-Shiller 10-City Composite Index was up 9.4 percent compared to May 2013 and the 20-City was 9.3 percent higher.  In April the two composites posted annual increases of 10.9 and 10.8 percent respectively.

Both Composites increased by 1.1 percent from April to May and for the second straight month all 20 cities had positive returns.  But that's only true on an unadjusted basis.  When it comes to to home price data, seasonal buying/selling trends tend to be kind to prices in the Spring and Summer months.  Adjusting for those affects, prices were down 0.3 percent in May--the first seasonally-adjusted decline in more than 2 years.

Regionally, Charlotte's increase of 1.4 percent was its highest of the year and it, along with Tampa which had a 1.8 percent increase, were the only two cities where the annual rates of increase did not decelerate.  Other large monthly gains were seen in San Francisco at 1.6 percent and Chicago at 1.5 percent.  On the low end of the scale Phoenix and San Diego, up 0.4 and 0.5 respectively, were the only cities with gains under one percent.

"Home prices rose at their slowest pace since February of last year," David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones said.  "The 10- and 20-City Composites posted just over 9 percent, well below expectations.  Month-to-month, all cities are posting gains before seasonal adjustment; after seasonal adjustment 14 of 20 were lower."   

Nine cities still posted double-digit annual increases in May.  The largest were Las Vegas (16.9 percent), San Francisco (15.4 percent), Miami (13.2 percent), and San Diego (12.4 percent).  The San Francisco and San Diego increases represented a three point deceleration in the rate of increase.  Double digit gains were also posted by Los Angeles, Detroit, Atlanta, Tampa, and Portland,

"Housing has been turning in mixed economic numbers in the last few months," Blitzer said.  "Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag.  At the same time the broader economy and especially employment are showing larger improvements and substantial gains.

Average home prices across the U.S. in May were back to summer 2004 levels.  The peak to current decline for both the 10- and 20- City Composites measured from July/July 2006 was 17-18 percent.  Since the post-crash low in March 2012 the 10-City Composite has recovered by 26.5 percent and the 20-City by 27.3 percent.

Nine cities showed higher monthly increases in May than in April.  In addition to Charlotte and Tampa they included Cleveland, Detroit, Las Vegas, Los Angeles, Miami, Minneapolis, and New York.  Dallas and Denver continue to set new price peaks while Detroit remains the only city below its January 2000 base value at a current index of 96.11.

The Case-Shiller indices are constructed to accurately track the price path of typical single-family homes located in each of the 20 metropolitan areas.  Ach index combines matched prices pairs from the available universe of arms-length sales data.  The indices have a base value of 100 in January 2000 so a home with a current index value of 150 has increased in value by 50 percent since that date.