May Case-Shiller Home Price Index 20-City Composite Stable with -1.7% YoY Loss

Highlights

• May 2023: All 20 major metro markets see month-over-month price increases.
• Year-over-year: Slight decline in national home prices, but some cities shine.
• Regional Divide: Midwest outperforms, while Pacific coast cities lag behind.

Overview

S&P Dow Jones Indices (S&P DJI) has just released the latest results for the S&P CoreLogic Case-Shiller Indices, which provide a comprehensive overview of U.S. home prices. The data for May 2023 shows encouraging signs, as all 20 major metro markets reported month-over-month price increases for the third consecutive month.

US Home Prices Dip YoY

On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a -0.5% annual decrease in May, a slight decline from the -0.1% loss in the previous month. The 10-City Composite showed a decrease of -1.0%, a small improvement from the -1.1% decrease in the previous month. The 20-City Composite remained stable with a -1.7% year-over-year loss, unchanged from the previous month.

Chicago, Cleveland, New York Lead

Among the 20 cities, Chicago, Cleveland, and New York stood out with the highest year-over-year gains in May. Chicago claimed the top spot with an impressive 4.6% year-over-year price increase, followed closely by Cleveland at number two with a 3.9% increase, and New York secured the third position with a 3.5% increase. Interestingly, there was an even split of 10 cities reporting lower prices and 10 cities reporting higher prices in the year ending May 2023 compared to the previous year.

May Sees Strong U.S. Housing Growth

Looking at the month-over-month figures before seasonal adjustment, the U.S. National Index experienced a notable 1.2% increase in May, while both the 10-City and 20-City Composites showed stronger growth with increases of 1.5%. After seasonal adjustment, the U.S. National Index still posted a healthy month-over-month rise of 0.7%, while the 10-City Composite gained 1.1%, and the 20-City Composites showed a solid increase of 1.0%.

US Home Prices Show Resilience

According to Craig J. Lazzara, Managing Director at S&P DJI, the rally in U.S. home prices continued in May 2023. The National Composite rose by 1.2%, and it now stands merely 1.0% below its peak in June 2022. The recovery in home prices is widespread, with prices rising in all 20 cities in May (as they did in March and April). Adjusted for seasonality, 19 cities still showed rising prices in May, with Phoenix being the only outlier with a minor decline of 0.1%. On a trailing 12-month basis, the National Composite is only 0.5% below its May 2022 level, and the 10- and 20-City Composites are also slightly negative year-over-year.

Regional Divide

Regional differences remain evident, with the Rust Belt cities – Chicago, Cleveland, and New York – emerging as the top performers. Conversely, the Pacific coast cities, particularly Seattle and San Francisco, lagged at the bottom. However, the Midwest surprisingly took the lead as the strongest region in the country, surpassing the Southeast. The West, on the other hand, continued to be the weakest.

US Housing Market: Positive Outlook

The data supports the idea that home prices in the U.S. started to decline after June 2022, and the recent uptrend indicates that the final month of the decline may have been January 2023. While potential factors like mortgage rate increases or general economic weaknesses could affect future months, the overall breadth and strength of May’s report are encouraging, suggesting a positive outlook for the market.

Summary:  US Housing Market Resilient

In conclusion, the U.S. housing market showed resilience in May 2023, with widespread price increases across major metro markets and a promising recovery trend. Investors and homeowners can find hope in the upward trajectory, especially in cities like Chicago, Cleveland, and New York, which have led the charge in boosting home prices. However, keeping an eye on regional disparities and external factors will remain crucial for a more nuanced understanding of the market’s short-term forecast.