Home Prices Maintain Momentum
Following solid gains in March and April, U.S. home prices increased another 0.6% from April to May per Case-Shiller, bringing the total gain over the past three months to 2.2%. After adjusting for normal seasonal patterns, prices were essentially flat, but home values remain 1.1% higher than they were a year ago.
A separate report from the Federal Housing Finance Agency (FHFA) showed a similar trend.
On a seasonally adjusted basis, home prices rose 0.3% in May, while actual prices increased 0.8%. That followed gains of 0.7% in April, 1.0% in March, and 0.9% in February, for a combined increase of 3.4% over the four-month period. Compared to a year ago, prices for homes backed by conventional loans were up 2.2%.
The bottom line? While seasonal adjustments can make price growth appear more
modest, home values have continued to trend higher this spring. For both homeowners
and buyers, steady appreciation can add up over time. For example, a $500,000 home that appreciates 4% over a year would increase in value by about $20,000.