National home price appreciation grew faster in May as eleven metro areas experienced an acceleration in price growth. Two metro areas, New York and Detroit, typically considered higher house price areas, recorded outright declines in house prices.
The Case-Shiller U.S. National Home Price Index, released by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 4.9% in May, faster than the pace of growth in April, 4.1%, but still the lowest rate since July 2017. In May, home prices were 9.5% above their pre-recession peak level, reached in February 2007. Continued house price appreciation reflects the acceleration in economic growth in the second quarter and tight inventory in May.
The purchase-only House Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 2.9% in May, remaining the same as in the previous month.
In addition to tracking home price changes nationwide, S&P also estimated home price indexes across the 20 metro areas. The bars in Figure 2 show the 20 major U.S. metropolitan areas’ annual growth rates in April 2018 and in May 2018. The red line presents the national growth rates in May 2018; the green line presents the national growth rates in April 2018.
In May, the annual growth rates of the 20 metro areas ranged from -3.3% to 17.7%. Among the 20 metro areas, Seattle, Phoenix and Las Vegas reported the highest annual growth rates. Seattle led the way with a 17.7% increase, followed by Phoenix with a 10.6% increase and Las Vegas with 8.0%. Six of the 20 metro areas exceeded the national average of 4.9% in May. Compared with last month, in May, eleven metro areas accelerated, seven metro areas decelerated and two metro areas, Detroit (-2.2%) and New York (-3.3%), experienced price declines in May.