Are Home Price Increases Beginning To Slow?
The S&P Case-Shiller Home Price Indices are considered the leading measure of U.S. home prices. According to their most recent release, which covers data through the end of May, national home prices are up 4.5 percent year-over-year – which is down from 4.6 percent in the previous month's report. Craig J. Lazzara, managing director and global head of index investment strategy at S&P, says though home prices are still increasing, they may be rising at a slower rate than before. “In contrast with the past eight months, May's gains were less than April's,” Lazzara said. “Although prices increased in May, in other words, they did so at a decelerating rate. We observed an analogous development at the city level: prices increased in all 19 cities for which we have data, but accelerated in only 3 of them (in contrast with 12 cities last month and 18 the month before that).” Lazzara cautions that decelerating price increases are different than actual price declines. In short, home prices are still headed higher, even if they may be moving up less quickly than before.