WASHINGTON – U.S. home prices rose in May compared with a year earlier, but the gains have slowed.
Data provider CoreLogic said Tuesday that prices increased 8.8 per cent in May compared with 12 months earlier. The pace of gains has slowed as more homes have come onto the market, according to CoreLogic.
On a month-to-month basis, prices rose 1.2 per cent from April to May. But CoreLogic’s monthly figures aren’t adjusted for seasonal patterns, such as warmer weather, which can affect sales.
Prices increased the most in Western states, including Hawaii, California and Nevada.
Home sales began to stall in the middle of last year after double-digit price increases and higher mortgage rates made real estate less affordable for many people.
But sales rose last month as price gains have moderated and mortgage rates have dipped.
Sales of existing homes climbed 4.9 per cent in May to a seasonally adjusted annual rate of 4.89 million homes, according to the National Association of Realtors.
However, sales are down 5 per cent year-over-year.
The Realtors forecast that sales of existing homes will decline 2.8 per cent this year to 4.95 million, compared with 5.1 million in 2013.
Sluggish sales, in turn, will slow annual price gains this year to roughly 5 per cent or 6 per cent, economists predict.
Prices rose in the 12 months ending in May in every state, CoreLogic said. The states with the biggest price gains were Hawaii, 13.2 per cent; California, 13.1 per cent; Nevada, 12.6 per cent; Michigan, 11.8 per cent; New York, 11 per cent; Georgia, 10.3 per cent; and Oregon, 10.1 per cent.
Ninety-four of the 100 largest metro areas reported higher prices in May compared with a year earlier.
The six that did not record an increase were: Worcester, Massachusetts; Hartford, Connecticut; New Haven, Connecticut; Little Rock, Arkansas; Rochester, New York; and Winston-Salem, North Carolina.
Average prices have risen nationwide for the past 27 months. Still, homes nationwide are 13.5 per cent below their peak values in April 2006.
Ten states have exceeded their previous peaks, including Alaska, Louisiana, Oklahoma, Nebraska, Iowa, South Dakota, North Dakota, Colorado, Texas and New York.