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Home prices rise modestly in May as growth lags inflation

FHFA said U.S. house prices jumped 0.3% in May, while the annual pace slowed to 2.2%, still below inflation-adjusted gains.

Reported · Written up by our desk · Residential

Home price growth stayed modest in May, with both FHFA and the S&P CoreLogic Case-Shiller indexes showing slightly firmer year-over-year appreciation that nevertheless lagged inflation, according to Mortgage News Daily.

FHFA reported U.S. house prices rose 0.3% on a seasonally adjusted basis in May, reversing April’s 0.1% decline. On an annual basis, prices were 2.2% higher than a year earlier, up from 2.0% in April, but still far below the faster gains seen in the post-pandemic boom.

Regional performance remained uneven across both national and local measures. Among nine census divisions, seasonally adjusted monthly changes ranged from a 1.4% increase in the East South Central division to a 0.6% decline in the Pacific division, while the Middle Atlantic led year-over-year growth at 4.5% and the Pacific was the only division to post an annual decline of 0.3%.

Case-Shiller’s national gauge also showed improvement but continued to indicate slower momentum: the U.S. National Home Price Index rose 1.1% year over year in May after 0.8% in April, while the 10-City Composite gained 2.4% and the 20-City Composite climbed 1.6% as of May. Among the 20 metros, Chicago led with 6.9% annual appreciation, followed by New York at 4.2% and Cleveland at 3.1%, while Las Vegas fell 1.9% and Seattle and Denver each declined 1.8%.

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