Home prices rose by 1.8 percent from 14.8 percent growth in April. Low interest rates and a nationwide inventory shortage are causing home prices to rise at lightning speed while setting an obstacle for buyers.
“A month ago, I described April’s performance as ‘truly extraordinary,’ and this month I find myself running out of superlatives,” Craig Lazarra, Managing Director and Global Head of Index Investment Strategy at S&P, said in a statement. “The 16.6 percent gain is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. As was the case last month, five cities – Charlotte, Cleveland, Dallas, Denver, and Seattle – joined the National Composite in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 17 cities, price gains were in top decile. ”
Once again, Phoenix, San Diego and Seattle saw the highest increases out of all American cities — 25.9, 24.7 and 23.4 percent respectively.
“The housing market’s historically tight inventory conditions finally started to ease in May, but that did little to immediately tame the record-strong home price appreciation that the market has experienced in recent months,” Matthew Speak, senior economist at Zillow, said in a statement. “The number of available homes across the nation finally ticked up this spring, albeit from a historically low reference point, after spending most of the last year in a steady decline. Still, price pressures remain very firm and appear ready to stay that way in the months to come.”
The S&P/Case-Shiller U.S. National Home Price Index is “a composite of single-family home price indices that is calculated every month; the indices for the nine U.S. Census divisions are calculated using estimates of the aggregate value of single-family housing stock for the time period in question.”
BY VERONIKA BONDARENKO – inman