U.S. home prices jumped 12.2 percent in May compared with a year ago
WASHINGTON — Home prices jumped 12.2 percent in May compared with a year ago, the biggest annual gain since March 2006. The increase shows the housing recovery is strengthening.
The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday surged 2.4 percent in May from April. The month-over-month gain nearly matched the 2.6 percent increase in April from March — the highest on record.
The price increases were widespread. All 20 cities showed gains in May from April and compared with a year ago.
Prices in Dallas and Denver reached the highest level on records dating to 2000. That marks the first time since the housing bust that any city has reached an all-time high.
The Standard & Poor's/Case-Shiller does not track prices in Pittsburgh metro area, but prices have also been rising here, according to RealStats, a South Side-based real estate information company.
In May, the average price of a house in the five-county Pittsburgh region was $169,580, up 1.3 percent over the $167,472 for the same month last year, said RealStats. The figures are for Allegheny, Beaver, Butler, Washington and Westmoreland counties.
Home values are rising as more people are bidding on a scarce supply of houses for sale. Steady price increases, along with stable job gains and historically low mortgage rates, have in turn encouraged more Americans to buy homes.
One concern is that higher mortgage rates could slow home sales. But many economists say rates remain low by historical standards and would need to rise much faster to halt the momentum.
Svenja Gudell, senior economist at Zillow, a home price data provider, said a big reason for the recent price gains is that foreclosed homes make up a smaller proportion of overall sales. Foreclosed homes are usually sold by banks at fire-sale prices.
“Typical home values have appreciated at roughly half this pace for the past several months, which is still very robust,” Gudell said.
Higher mortgage rates and a likely increase in the number of homes for sale in the coming months should slow the pace of price gains and stabilize the housing market, Gudell said.
The index covers roughly half of homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The May figures are the latest available. They are not adjusted for seasonal variations, so the monthly gains reflect more buying activity over the summer.
Despite the recent gains, home prices are still about 25 percent below the peaks they reached in July 2006. That's a key reason the supply of homes for sale remains low, as many homeowners are waiting to recoup their losses before putting their houses on the market.
Dallas and Denver, the two cities that reached record highs, were not hit hard by the housing bust and therefore didn't experience the sharp price swings as cities in Nevada, Arizona, California and Florida did.
In Dallas, prices fell only 11.2 percent from their previous peak in June 2007 through February 2009. That's far less than Las Vegas, where prices plummeted by more than half. Since bottoming out, home prices in Dallas have increased nearly 14 percent.
In Denver, prices dropped 14.3 percent from August 2006 until they also hit bottom in February 2009. Since then, they have risen 17.3 percent.
The biggest price gains are occurring in many of the states that experienced the worst housing bust.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Experts: If health insurers’ safeguard goes broke, consumers could pay
- Visa limits vex businesses
- Nike, Under Armour invest in watching exercisers’ steps
- Rules could kick door open for nuclear power
- Scented society is killing cheap perfume industry
- Paper’s prevalence unlikely to diminish
- Camera prevalence approaches sci-fi realm
- Kings Family Restaurants sold to California firm
- ‘Promposals’ can be small as burritos, big as Jumbotrons
- MedExpress bought by United Health Group
- Mylan raises bid for fellow drugmaker; Perrigo says ‘no’