S&P CoreLogic Case-Shiller Home Price Index (HPI) for all 9 U.S. census divisions gained 5.6% in May, hitting an all-time high for the sixth straight month. The 10-City Composite gained 4.9%, down from 5.0% during the previous month, while the 20-City Composite gained 5.7% year-over-year, down from 5.8% in April.
“Home prices continue to climb and outpace both inflation and wages,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging.”
Seattle, Portland, and Denver led the way with the highest year-over-year gains among the 20 cities. In May, Seattle saw a 13.3% year-over-year price increase, followed by Portland with 8.9%, and Denver overtaking Dallas with a 7.9% gain. Nine (9) cities reported greater price increases in the year ending May 2017 versus the year ending April 2017.
Still, there is a clear weakness with 6 of the 20 cities, contracting for the second month in a row, including sharp declines in New York, Boston and Chicago.
“The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices,” Mr. Blitzer added. “New home construction, higher than during the recession but still low, is another factor in rising prices.”