House prices showed a larger than expected increase in May
The S&P/Case-Shiller home price index rose by 2.2% in May, beating the forecasts of economists, as all 20 of the nation’s largest metropolitan areas posted gains from April.
In addition the report indicated that 12 of the 20 cities now have higher prices than they did a year ago, suggesting a durable improvement.
Chicago, Atlanta and San Francisco posted the biggest monthly increases. Detroit, San Diego and Charlotte posted the smallest gains.
This rise occurs as mortgage rates fall to some of the lowest levels seen in years. The average 30-year fixed mortgage is at 3.6% while the average 15-year mortgage has fallen to 2.98%.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices stated:
“With May’s data, we saw a continuing trend of rising home prices for the spring. On a monthly basis, all 20 cities and both Composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April. Seventeen of the 20 cities and both Composites also saw improved annual rates of return. We have observed two consecutive months of increasing home prices and overall improvements in monthly and annual returns; however, we need to remember that spring and early summer are seasonally strong buying months so this trend must continue throughout the summer and into the fall.”
The Globe and Mail adds:
Builders are getting more confident, partly because they are seeing more interest from potential buyers. Builders broke ground in June on the most new homes and apartments in four years.
Even with the gains, the index is 33 per cent below its peak reached in the summer of 2006, at the height of the housing boom. Based on the 20-city index, home prices are now at about the same level as in early 2003.
Case-Shiller home price index
| Metro area |
May index
|
Change from April
|
Change from 2011
|
 |
|||
| Atlanta |
87.85
|
4.0%
|
-14.5%
|
|
|||
| Boston |
150.67
|
2.4%
|
-0.1%
|
|
|||
| Charlotte |
112.84
|
1.0%
|
0.9%
|
|
|||
| Chicago |
108.62
|
4.5%
|
-3.0%
|
|
|||
| Cleveland |
99.17
|
2.4%
|
-0.1%
|
|
|||
| Dallas |
118.6
|
1.9%
|
3.8%
|
|
|||
| Denver |
128.48
|
2.1%
|
3.7%
|
|
|||
| Detroit |
66.1
|
0.4%
|
0.6%
|
|
|||
| Las Vegas |
92.55
|
1.9%
|
-3.2%
|
|
|||
| Los Angeles |
165.76
|
2.2%
|
-2.0%
|
|
|||
| Miami |
143.35
|
1.4%
|
3.4%
|
|
|||
| Minneapolis |
113.47
|
3.1%
|
4.7%
|
|
|||
| New York |
160.4
|
1.4%
|
-2.8%
|
|
|||
| Phoenix |
111.92
|
2.7%
|
11.5%
|
|
|||
| Portland |
135.09
|
2.6%
|
0.4%
|
|
|||
| San Diego |
153.06
|
0.9%
|
-1.1%
|
|
|||
| San Fran. |
135.28
|
3.9%
|
0.6%
|
|
|||
| Seattle |
137.37
|
2.6%
|
0.6%
|
|
|||
| Tampa |
130.26
|
2.0%
|
2.5%
|
|
|||
| Washington |
185.55
|
2.5%
|
2.8%
|
|
|||
| The indexes have a base value of 100 in January 2000; so an index value of 150 translates to a 50% appreciation since then for a typical home in the market. Source: S&P Indices and Fiserv |
|||
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