United States: House price growth remains steady in May
July 25, 2017
House price growth was solid in May, supported by a low supply of both new and existing homes and a robust labor market. The S&P/Case-Shiller 20-city home composite index rose 0.8% in May, down from April’s revised 1.0% (previously reported: +0.9%). When adjusted for seasonal factors, home prices grew a much smaller 0.1% from the previous month, undershooting market expectations of a 0.3% rise.
On a year-on-year basis, home prices continued to climb across the board in May, rising 5.7%, down from April’s revised 5.8% (previously reported: +5.7% year-on-year). Of the 20 cities in the index, Seattle, Portland and Denver recorded the sharpest annual increases, while Chicago and Washington saw the weakest price growth.
Despite May’s minor deceleration, strong market fundamentals remain supportive of robust house price growth. Housing starts are trending higher, financing costs remain low and employment and income gains are healthy. Barring major surprises, continued home price appreciation should be seen in the months to come.
Author: David Ampudia, Economist