Single-Family Home Price Growth Eases from All-Time Highs

While single-family home price growth in the U.S. decelerated in May, increases remained at 35-year highs. The moderation in home prices comes amid higher mortgage rates which have nearly doubled over the past year and increasing concerns over inflation. Home prices jumped 19.7% year-over-year in May, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index which measures average home prices across the nation. Since April 2021, home prices have been rising at the fastest rates in the index’s 35 year-history, with increases ranging from 15% to nearly 21% annually during that period. The annual increase in May 2022 eased slightly from the upwardly revised record high jumps of 20.6% in April and May 2022 but was still one of the largest price hikes on record. The S&P CoreLogic Case-Shiller 20-City Composite Index posted a 20.5% annual gain in April, down from 21.2% the previous month. Of the 20 cities in the index, 16 reported lower year-over-year price increases in May 2022 compared to April 2022. However, all the cities in the index still recorded double-digit price growth over the past year, with Sun Belt cities logging the biggest gains. Tampa (36.1%), Miami (34.0%) and Dallas (30.8%) reported the highest year-over-year gains among the 20 cities in May. The smallest gains were seen in Minneapolis (11.5%), Washington, DC (12.2%) and Chicago (12.9%). As recently as February of this year, all 20 cities in the index reported accelerating annual home price gains.