U.S. Home Prices Surge in May

Home prices surge in May with all 20 Major Metro Markets

Highlights

• May 2023: All major metro markets see month-over-month price increases
• Year-over-year: Slight decline in national home prices, but some cities shine
• Regional Divide: Midwest outperforms, while Pacific coast cities lag behind

Overview

S&P Dow Jones Indices has just released the latest results for the S&P CoreLogic Case-Shiller Indices, which provide a comprehensive overview of U.S. home prices. The data for May 2023 shows encouraging signs, as all 20 major metro markets reported month-over-month price increases for the third consecutive month.

On a year-over-year basis, the S&P CoreLogic Case Shiller U.S. National Home price NSA index reported a -0.5% annual decrease in May, a slight decline from the -0.1% loss in the previous month. The 10-City Composite showed a decrease of -0.1%, a small improvement from the -1.1% decrease in the previous month. The 20-City Composite remained stable with a -1.7% year-over-year loss, unchanged from the previous month.

May Sees Strong U.S. Housing Growth

Looking at the month-over-month figures before seasonal adjustment, the U.S. National Index experienced a notable 1.2% increase in May, while both the 10-City and 20-City Composites showed stronger growth with increases of 1.5%. After seasonal adjustment, the U.S. National Index still posted a healthy month-over-month rise of 0.7%, while the 10-City Composite gained 1.1% and the 20-City Composites showed a solid increase of 1.0%.

U.S. Home Prices Show Resilience

According to Craig J. Lazzara, Managing Director at S&P DJI, the rally in U.S. home prices continued in May 2023. The National Composite rose by 1.2%, and it now stands merely 1.0% below its peak in June 2022. The recovery in home prices is widespread, with prices rising in all 20 cities in May. Adjusted for seasonality, 19 cities still showed rising prices in May, with Phoenix being the only outlier with a minor decline of 0.1%. On a trailing 12-month basis, the National Composite is only 0.5% below its May 2022 level, and the 10- and 20-City Composites are also slightly negative year-over-year.

Regional Divide

Regional differences remain evident, with the Rust Belt cities – Chicago, Cleveland and New York – emerging as the top performers. Conversely, the Pacific coast cities lagged at the bottom. However, the Midwest surprisingly took the lead as the strongest region in the country, surpassing the Southwest. The West, on the other hand, continued to be the weakest.

Summary: U.S. Housing Market Resilient

In conclusion, the U.S. housing market shoowed resilience in May 2023, with widespread price increases across major metro markets and a promising recovery trend. Investors and homeowners can find hope in the upward trajectory, especially in cities like Chicago, Cleveland, and New York, which have led the change in boosting home prices. However, keeping an eye on regional disparities and external factors will remain crucial for a more nuanced understanding of the markets short-term forecast.