Home-Price Gains in U.S. Cities Decelerate for 14th Month

(Bloomberg) -- Home prices in 20 U.S. cities in May decelerated for a 14th straight month, underscoring moderation in the nation’s real estate market.

The S&P CoreLogic Case-Shiller index of property values increased 2.4% from a year earlier after April’s 2.5% advance, according to data out Tuesday. The gauge for monthly basis prices improved slightly while nationally home-price growth also moderated from May of last year.

Key Insights

• The data show buyers remained sensitive to high asking prices even with mortgage rates close to their lowest level since late 2016, sustained job growth and steady wage gains. Residential construction hasn’t contributed to economic growth since the fourth quarter of 2017.
• A recent report showed sales of previously owned properties declined in June, missing forecasts in the latest signs of lukewarm demand as a limited supply of low- to mid-priced properties continued to weigh on demand.

Official’s View

“Though home price gains seem generally sustainable for the time being, there are significant variations between YOY rates of change in individual cities,” Philip Murphy, managing director and global head of index governance at S&P Dow Jones Indices, said in a release. “Seattle’s home price index is now 1.2% lower than it was in May 2018, the first negative YOY change recorded in a major city in a number of years.”

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• Home prices in Seattle declined 1.2% from a year earlier.
• Las Vegas, Phoenix and Tampa reported the highest year-over-year gains among the 20 cities; seven of the 20 cities reported greater annual price increases in May.

--With assistance from Jordan Yadoo.

To contact the reporter on this story: Ryan Haar in Washington at rhaar3@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle, Jeff Kearns

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