Home Prices Fell Year-Over-Year in May
Chicago had the fastest annual home-price growth in the country, while the weakest market was Seattle Single-family homes in Charlotte, N.C. Photo: Angela Owens/The Wall Street Journal By Nicole Friedman July 25, 2023 9:00 am ET Home prices fell from a year earlier in May for the second straight month, as elevated mortgage rates and still-high home prices sidelined buyers. The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell 0.5% in May, compared with a 0.1% decrease the prior month. The annual decline was the largest since 2012. Compared with the prior month, the index rose 0.7% in May on a seasonally adjusted basis, the fourth straight monthly increase. Mortgage rates climbed sharply in 2022 and have hovered between 6%
Single-family homes in Charlotte, N.C.
Photo: Angela Owens/The Wall Street Journal
Home prices fell from a year earlier in May for the second straight month, as elevated mortgage rates and still-high home prices sidelined buyers.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures home prices across the nation, fell 0.5% in May, compared with a 0.1% decrease the prior month. The annual decline was the largest since 2012.
Compared with the prior month, the index rose 0.7% in May on a seasonally adjusted basis, the fourth straight monthly increase.
Mortgage rates climbed sharply in 2022 and have hovered between 6% and 7% this year.
Mortgage rates rose rapidly in 2022, causing a major slowdown in home sales as buyers backed away from the market. But prices haven’t fallen that much from last year’s peak levels because the inventory of homes for sale has been unusually low as the higher mortgage rates made current homeowners reluctant to sell.
The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay and reflects a three-month moving average. Homes usually go under contract a month or two before they close, so the May data is based on purchase decisions made earlier this year.
“Home prices in the U.S. began to fall after June 2022, and May’s data bolster the case that the final month of the decline was January 2023,” said Craig Lazzara, managing director at S&P Dow Jones Indices.
The median existing-home sale price fell 0.9% in June from a year earlier to $410,200, according to the National Association of Realtors.
The Case-Shiller 10-city index fell 1% over the year ended in May, following a 1.1% decline in April. The 20-city index fell 1.7%, unchanged from April.
Economists surveyed by The Wall Street Journal expected the 20-city index to decline 1.9%.
Chicago had the fastest annual home-price growth in the country, at 4.6%, followed by Cleveland, at 3.9%. The weakest market was Seattle, where prices fell 11.3% on an annual basis.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found a 2.8% increase in home prices in May from a year earlier. The FHFA index rose 0.7% in May from the prior month on a seasonally adjusted basis.
Write to Nicole Friedman at [email protected]
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