The housing market remains a bright spot in the slowing economy. Learn more about the latest price gains.
U.S. home prices rose an average of 2.2 percent in May, according to data released today by S&P/Case-Shiller that shows continued gains for the U.S. housing market.
“With May’s data, we saw a continuing trend of rising home prices for the spring,” David M. Blitzer, of S&P Dow Jones Indices, said in a statement. “We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns.”
The trend is positive, but may be short lived, cautioned Blitzer. “We need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall,” he said. “The housing market seems to be stabilizing, but we are definitely in a wait-and-see mode for the next few months.”
Home prices improved in all 20 of the major metropolitan areas measured by the 20-City Composite Index from April to May, though the index posted a year-over-year decline of 0.7 percent and the 10-City Composite showed an annual decline of 1 percent. “While still negative, these annual changes are the best we’ve seen since in at least 18 months,” Blitzer said.
May’s gains put average home prices back to levels last seen in spring 2003 for the 20-City Composite and the summer of 2003 for the 10-City Composite, though both composites remain 33 percent below their 2006 peak.
Housing market data released last week shows that sales of new, single-family homes slowed 8.4 percent in June to a seasonally adjusted annual rate of 350,000 units.
“While we would have liked to see a third consecutive month of new-home sales gains in June, the fact remains that the sales numbers are up on both a quarterly and yearly basis, while builders continue to report that they are seeing more serious buyers in the market for a newly constructed home with all of the latest updates,” Barry Rutenberg, chairman of the National Association of Home Builders, said in a statement.
Pending home sales – a measure of contracts signed but not completed – also slowed in June, according to the monthly Pending Home Sales Index compiled by the National Association of Realtors and released last week. The index fell 1.4 percent to 99.3 in June, down from 100.7 in May. The group attributed the decline to tighter housing market inventory.