This year’s spring market was one for the history books as price spikes for single-family homes persisted in May.
According to the most recent S&P CoreLogic/Case-Shiller Indices, home prices saw a 16.6% gain in May, up from 14.8% in April. The price surge marked the second consecutive month of record-setting performance, according to experts.
All 20 cities saw higher annual price increases as the 10-City Composite increased 16.4%, while the 20-City Composite increased 17%.
Phoenix, San Diego and Seattle maintained their status as top-three markets with the highest gains in May. They recorded increases of 25.9%, 24.7% and 23.4%, respectively.
The complete data for the 20 markets measured by S&P:
Atlanta, Ga.
May/April: 2.2%
Year-Over-Year: 14.3%
Boston, Mass.
May/April: 1.4%
Year-Over-Year: 17.4%
Charlotte, N.C.
May/April: 2.4%
Year-Over-Year: 16.9%
Chicago, Ill.
May/April: 1.8%
Year-Over-Year: 11.1%
Cleveland, Ohio
May/April: 1.5%
Year-Over-Year: 13.6%
Dallas, Texas
May/April: 2.8%
Year-Over-Year: 18.5%
Denver, Colo.
May/April: 2.2%
Year-Over-Year: 17.4%
Detroit, Mich.
May/April: 1.7%
Year-Over-Year: 15.1%
Las Vegas, Nev.
May/April: 2.9%
Year-Over-Year: 15.5%
Los Angeles, Calif.
May/April: 2.1%
Year-Over-Year: 17.0%
Miami, Fla.
May/April: 2.4%
Year-Over-Year: 16.6%
Minneapolis, Minn.
May/April: 2.1%
Year-Over-Year: 12.8%
New York, N.Y.
May/April: 1.1%
Year-Over-Year: 15.2%
Phoenix, Ariz.
May/April: 3.7%
Year-Over-Year: 25.9%
Portland, Ore.
May/April: 2.4%
Year-Over-Year: 17.5%
San Diego, Calif.
May/April: 2.9%
Year-Over-Year: 24.7%
San Francisco, Calif.
May/April: 2.6%
Year-Over-Year: 18.2%
Seattle, Wash.
May/April: 2.8%
Year-Over-Year: 23.4%
Tampa, Fla.
May/April: 2.5%
Year-Over-Year: 18.0%
Washington, D.C.
May/April: 1.7%
Year-Over-Year: 14.8%
What the Industry Is Saying:
“A month ago, I described April’s performance as ‘truly extraordinary,’ and this month, I find myself running out of superlatives. The 16.6% gain is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. As was the case last month, five cities—Charlotte, Cleveland, Dallas, Denver and Seattle—joined the National Composite in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 17 cities, price gains were in the top decile.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. May’s data continue to be consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.” — Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P Dow Jones Indices
“This month’s S&P Case Shiller Index highlighted a housing market in full swing during May 2021, when strong demand and insufficient supply pushed home prices up at a record-breaking pace. The combination of historically low mortgage rates, business re-openings and the lifting of pandemic restrictions fueled a buying frenzy with multiple bids, price escalation clauses and contingency waivers.
“The summer buying season is fully underway, with many families seeking to take advantage of the current market and favorable financing to find their next home before the start of the school year. The good news is that a combination of factors is creating home-buying opportunities. On one hand, mortgage rates have been dropping for a month, moving toward the lows we saw in January and February this year. On the other hand, more homeowners are entering the market, with the number of freshly listed homes for sale advancing in 14 of the last 17 weeks. This dynamic confluence of housing developments is helping keep price growth in check as we approach August. Looking at the months ahead, we expect inventory to continue growing into the fall, shifting the typical seasonal trend and keeping real estate activity on a roll.” — George Ratiu, Senior Economist, Realtor.com
Jordan Grice is RISMedia’s associate content editor. Email him your real estate news ideas to jgrice@rismedia.com.
