A 9.3 percent year-over-year increase in home prices for May in a survey of 20 U.S. cities doesn’t sound like anything to worry about.
But there is some concern about the strength of the housing recovery, since this jump in prices is lower than the 10.8 percent year-over-year increase the previous month. May’s figure also marks the slowest rate of increase since February 2013.
It is also the slowest rate of increase since February 2013. Of the 20 cities surveyed, 18 had slower year-over-year growth in May than in April, according to the S&P/Case-Shiller Home Price Index survey released Tuesday.
“Housing has been turning in mixed economic numbers in the last few months,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Prices and sales of existing homes have shown improvement while construction and sales of new homes continue to lag. At the same time, the broader economy and especially employment are showing larger improvements and substantial gains.”
Year-over-year, nine cities posted double-digit increases in May 2014 – Las Vegas (16.9%), San Francisco (15.4%), Miami (13.2%), San Diego (12.4%), Los Angeles (12.3%), Detroit (11.9%), Atlanta (11.2%), Tampa (10.2%) and Portland (10.0%).
The Sun Belt continues to lead with seven of the top eight performing cities. Eighteen of 20 cities had lower year-over-year numbers than last month; San Francisco and San Diego saw their year-over-year figures decelerate by about three percentage points.
Charlotte was the only MSA to see its annual rate improve; it posted 4.7 percent year-over-year in May versus 4.5 percent in April. Tampa held steady with a gain of 10.2 percent. Despite seeing their rates decrease by two to three percentage points, Las Vegas remained the top performing city with a return of +16.9 percent, followed by San Francisco at +15.4 percent.