May Case-Shiller Index Reports Rise in Home Prices for 3rd Straight Month

New York, NY, July 25, 2023 -- The latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices, show month-over-month price increases in all 20 major metro markets for the third straight month. After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.7% in May 2023.

Craig J. Lazzara, managing director at S&P Dow Jones Indices, notes that the National Composite stands only 1.0% below its June 2022 peak.

The 10- and 20-City Composites also rose in May, in both cases by 1.5%.

On a trailing 12-month basis, the National Composite is 0.5% below its May 2022 level, with the 10- and 20-City Composites also negative on a year-over-year basis.

Citing “the Revenge of the Rust Belt,” Lazzara reports that Chicago (+4.6%), Cleveland (+3.9%) and New York (+3.5%) were the top performers – unusual since it’s been five years since a cold-weather city held the top spot – while Seattle (-11.3%) and San Francisco (-11.0%) were the worst.

The Midwest (+2.7%) unseated the Southeast (+2.1%) as the country’s strongest region. The West (-6.9%) remained weakest.

“Home prices in the U.S. began to fall after June 2022, and May’s data bolster the case that the final month of the decline was January 2023,” says Lazzara. “Granted, the last four months’ price gains could be truncated by increases in mortgage rates or by general economic weakness. But the breadth and strength of May’s report are consistent with an optimistic view of future months.”

Speaking to CNBC recently, Robert Shiller, professor of economics at Yale University, said a decade-long rally in U.S. home prices could come to an end once the Federal Reserve stops its rate-hiking cycle. The Fed is scheduled to announce its next rate decision tomorrow.

Explaining U.S. home prices’ steady gains since 2012, Shiller said, “The fear of interest rate increases has influenced people’s thinking - it’s not just the homeowners, it’s new buyers who wanted to get in before the interest rates went up even more. They wanted to lock in. So that’s been a positive influence on the market. But it’s coming to an end.”