Case Shiller Home Prices: Steady, If Modest, Gains

Bottom Line: Home prices rose modestly in May as strong markets like Vegas and Phoenix kept the national averages in positive territory. But higher priced and higher tax regions continued to struggle. Chicagoland saw slight price declines, while most coastal cities only saw slight gains. Once red-hot Seattle has seen price gains cool, now up just 0.1% from a year ago. LA and San Diego saw gains while the San Francisco Bay Area was flat. Some of the slowdown in these higher price markets is likely still due to changes to changes in the federal tax treatment of local property and mortgage interest. Overall the trend is towards very slow house price appreciation on average nationwide as these higher priced markets slowly move towards a new equilibrium. Case Shiller 20-City Home Price Index ROSE by 0.1% (seasonally adjusted) in May to 216.0, compared with market expectations for an increase of 0.2%. Home prices are 2.4% ABOVE their year ago level. Nationwide home prices are now just 4.5% ABOVE their April 2006 peak, near late 2005 levels and 57.9% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index ROSE by 0.6% on the month. Housing prices rose in 14 of the 20 metro areas in May (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis. Seattle had the smallest year-over-year increase at 0.1% while Las Vegas had the largest year-over-year increase at 7.1%.