MW: U.S. home prices jump; Dallas, Denver at record
By Steve Goldstein, MarketWatch
WASHINGTON (MarketWatch) — U.S. home prices continued to accelerate in May, with Dallas and Denver reaching record levels, according to data released Tuesday.
The S&P/Case-Shiller 20-city composite jumped 2.4% in May to take the year-on-year increase to 12.2%.
Prices in each of the 20 cities rose by at least 1.2%, and San Francisco saw a monthly pop of 4.3%.
On a seasonally adjusted basis, the price gains cooled to a still-strong 1%.
“Two cities set new highs, surpassing their pre-crisis levels and five cities – Atlanta, Chicago, San Diego, San Francisco and Seattle – posted monthly gains of over 3%, also a first-time event,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices, in a statement.
Chicago prices leapt 3.7%, Atlanta prices rose 3.4%, and San Diego and Seattle each saw a 3.1% price gain.
The fall from the peak in the summer of 2006 nationally is roughly 25%.
Despite the back-to-back strong gains — home prices gained 2.6% in April — the rise in May largely precede a spike in interest rates that may dampen demand.
“It takes time for mortgage rates to affect sales and then for sales to affect prices, so the rate effect, if any, won’t hit the [Case-Shiller] price data until the fall. We are inclined, therefore, to see the May number as noise,” said Ian Shepherdson, chief economist of Pantheon Macroeconomics, in a note to clients.
The earliest indication of home prices, the median price of existing homes, did rise in June, though that is calculated in a different way than the Case-Shiller index.
Steve Goldstein is MarketWatch's Washington bureau chief. Follow him on Twitter @MKTWgoldstein.
