Case Shiller Home Prices: Gains Flattened in May

Bottom Line: Home prices nationwide were nearly unchanged in May as the pandemic impacted housing markets. Well below expectations for the nationwide average to increase 0.3%, prices were volatile, particularly in the West. Phoenix and Portland, for instance, saw gains, while prices in San Francisco and Seattle fell. Expect more dispersion and volatility in prices across regions and within regions as the pandemic may mark a structural shift in demand back towards single-family, suburban housing after a multi-decade trend towards re-urbanization and multi-family housing. On a trend basis, the national averages will likely hover in the area of 2-3% annualized gains. Case Shiller 20-City Home Price Index ROSE by 0.04% (seasonally adjusted) in May to 223.8, compared with market expectations for an increase of 0.3%. Home prices are 3.7% ABOVE their year-ago level. Nationwide home prices are now just 8.3% ABOVE their April 2006 peak, near late 2005 levels and 63.6% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index ROSE by 0.4% on the month. Housing prices rose in 13 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. Chicago had the smallest year-over-year increase at 1.3% while Phoenix had the largest year-over-year increase at 9.5%.