US home price growth accelerated annually in May, though values dropped in real terms for a 12th straight month amid continued affordability headwinds, S&P Global (SPGI) division S&P Dow Jones Indices said Tuesday.
The national S&P Cotality Case-Shiller Index rose 1.1% year over year in May without seasonal adjustments, up from a 0.9% gain the month prior. The 10- and 20-city composites advanced 2.4% and 1.6%, respectively. The two measures accelerated from April's growth rates of 1.8% and 1.2%, respectively.
"May's data suggests that US home prices continue to decline in real terms," said Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices. "At the same time, inflation peaked at 4.2% in May, its highest level in over three years."
Chicago logged the highest annual price gain for a third consecutive month among the 20 cities, rising 6.9% in May. New York and Cleveland were next on the list. Las Vegas posted the lowest return of a 1.9% drop, the data showed.
Sequentially, pre-seasonally adjusted national home prices increased 0.6% in May, compared with 0.8% growth the month prior. The 10- and 20-city composite indexes were up 0.9% each in May. In April, the two composites advanced 1% each, the report showed.
Persistent inflation and 30-year mortgage rates reaching 6.5% in May continued to weigh heavily on housing affordability, Kaufman said. "Against this backdrop, housing demand remains constrained, elevated borrowing costs continue to discourage potential homebuyers, and housing values decline in real terms for existing homeowners."
Separately, the Federal Housing Finance Agency said US home prices increased 0.3% sequentially in May, following a 0.1% drop the previous month. Annually, prices rose 2.2% in May, according to the report.
Earlier this month, Redfin.com said US housing payments in June rose for the first time in eight months as home prices hit a record high and mortgage rates remained elevated.
Price: $428.03, Change: $-11.80, Percent Change: -2.68%
