Home prices continued to increase in May, but at a slightly slower pace compared to last month.
The S&P CoreLogic Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 1.6% in May, following a 5.0% increase in April. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 4.5% annual gain in May, down from 4.6% in April. It marks the first decrease after the eight straight months of gains. House price appreciation is largely driven by existing home sales and inventory. The May decline in home price appreciation reflected the recent declines in existing home sales.
Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), declined at a seasonally adjusted annual rate of 3.0% in May, following a 1.8% increase in April. On a year-over-year basis, the FHFA Home Price NSA Index rose by 4.9% in May, after an increase of 5.5% in April.
In addition to tracking home price changes nationwide, S&P reported home price indexes across 19 metro areas in May (Detroit metro area data was missing in March, April and May 2020 because transactions records for Wayne county, Michigan were unavailable). The bars in Figure 2 show the 19 major U.S. metropolitan areas’ annual growth rates in April and May 2020. The red line presents the national growth rate in May 2020; the blue line presents the national growth rate in April 2020.
In May, the annual growth rates of the 19 metro areas ranged from -7.7% to 7.9%. Among the 19 metro areas, Phoenix, Charlotte and Tampa had the highest home price appreciation. Phoenix led the way with a 7.9% increase, followed by Charlotte with a 5.0% increase and Tampa with a 4.9% increase. Eight of the 19 metro areas exceeded the national average of 1.6% in May. Five metro areas, including New York (-1.0%), Las Vegas (-1.3%), Seattle (-2.9%), San Francisco (-6.0%) and Minneapolis (-7.7%), experienced price declines in May.
Compared to last month, 3 of the 19 metro areas had an acceleration in home price appreciation while the remaining 16 metro areas experienced a deceleration. Home prices in Minneapolis, which had the highest home price appreciation in April, fell by 7.7% in May.