The numbers: Home price inflation slowed further in May as the S&P CoreLogic Case-Shiller 20-city index rose 0.1% in May compared with April on a seasonally adjusted basis. On an annual basis, prices were 2.4% higher, down from a 2.5% annual rate in prior month.
That is the 14th straight month in which the annual rise in home prices has slowed and is the slowest growth rate since August 2012.
What happened: Home prices continue to rise but at a much slower pace. The 12-month change is down from 6.7% in March 2018. Seattle is now the first city “in a number of years” where prices are lower on a year-on-year basis. Las Vegas and Phoenix remain quite strong.
Big picture: Home price rises have been slowing since the beginning of 2018 and lower mortgage rates haven’t stopped the trend. Economists think that further easing of home price appreciation is needed to boost sales. Pending home sales rose 1.6% over the past 12 months, the first gain in 17 months, a trade group said Tuesday.
What are they saying? “We expect housing to plateau in 2019, rather than deteriorate further. This reflects our view that home affordability should improve because of gradually rising wages and the continued pickup in employment, both of which support household incomes at a time when home prices are increasing at a more subdued rate,” said Blerina Uruci, economist at Barclays.