The S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA) Tuesday released their respective home price indices for April. National home prices increased at a more moderate annual growth rate, while local home price gains varied.
US House Prices, Pending Home Sales: April & May 17
The Case-Shiller US National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 2 per cent in April, down from 3 per cent in March. After reaching 8.7 per cent in November 2016, house price appreciation has been decelerating.
The Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 8.3 per cent in April, slower than 8.8 per cent in March, confirming the deceleration in home prices.
Elsewhere, the Pending Home Sales Index decreased for the third month in a row, and annually for the second year in a row, said the National Association of Realtors (NAR) Wednesday. The Pending Home Sales Index decreased to 108.5 in May, down 0.8 per cent from a downwardly revised 109.4 in April, and down 1.7 per cent from the level a year ago. Among the 20 metro areas, Detroit, MI, Seattle, WA, and Las Vegas, NV, had the highest home price appreciation, according to the S&P/ Case-Shiller and the Federal Housing Finance Agency (FHFA) release Tuesday. Detroit led the way with 23.7 per cent, followed by Seattle with 13.8 per cent and Las Vegas with a 12.1 per cent increase. Fifteen out of the 20 metro areas had home price appreciation. Moreover, eleven metro areas had higher home price appreciation than the national level of 2 per cent. Home prices depreciated in the remaining five metro areas in April.
US Pending Home Sales Index
The Pending Home Sales Index (PHSI) remained at in the Midwest, and decreased in the Northeast, South and West by 0.8 per cent, 1.2 per cent and 1.3 per cent respectively, said NAR Wednesday. Year-over-year, the PHSI increased 3.1 per cent in the Northeast, but fell 1.4 per cent in the South, 2.8 per cent per cent in the Midwest and 4.5 per cent in the West. This was below expectations of a 0.5 per cent increase for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in June and July.
May existing sales increased 1.1 per cent, despite two monthly declines in the PHSI. However, National Association of Realtors reported a 7.2 per cent year-over-year decline in sales of homes priced under US$100,000 and only a 2 per cent year-over-year sales increase in homes priced between US$100,000 and US$250,000. Meanwhile, sales jumped 26 per cent for homes priced between US$750,000 and one million dollars, while sales for homes at a million dollars and up increased 29.1 per cent. The low inventory of homes for sale continues to dampen sales in the rst two categories, but the sharp dichotomy suggests a more troubling picture regarding affordability. However, sales of new homes gained 2.9 per cent in May, and as the economy adds jobs, the increased demand among first-time buyers will support new and existing sales in 2017.