US home prices slowed sharply to a single-digit rate in May on a year-over-year basis, the slowest rate since February 2013, according to a key big-city home-price report.
US city home prices based on 10 major US cities rose 9.4% in the year ended in May, according to the S&P/Case-Shiller Home Price Index survey released Tuesday. The 20-city price index increased 9.3% - - down from a 10.8% yearly rate in April.
In the month of May, the 10- and 20-City Composites posted gains of 1.1%. For the second consecutive month, all twenty cities posted increases. Charlotte posted its highest monthly increase of 1.4% in over a year. Tampa gained 1.8%, followed by San Francisco at +1.6% and Chicago at +1.5%.
Phoenix and San Diego were the only cities to gain less than one percent with increases of 0.4% and 0.5%, respectively.
“Home prices rose at their slowest pace since February of last year,” said David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites posted just over 9%, well below expectations. Month-to-month, all cities are posting gains before seasonal adjustment; after seasonal adjustment 14 of 20 were lower.
“Year-over-year, nine cities – Las Vegas (16.9%), San Francisco (15.4%), Miami (13.2%), San Diego (12.4%), Los Angeles (12.3%), Detroit (11.9%), Atlanta (11.2%), Tampa (10.2%) and Portland (10.0%) – posted double-digit increases in May 2014. The Sun Belt continues to lead with seven of the top eight performing cities. Eighteen of 20 cities had lower year-over-year numbers than last month; San Francisco and San Diego saw their year-over-year figures decelerate by about three percentage points.
“Housing has been turning in mixed economic numbers in the last few months. Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.”
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