U.S. home prices continue to escalate, with average home prices tied to the 10- and 20-city composite indices increasing 2.5% and 2.4% from April to May, according to the S&P/Case-Shiller Home Price Indices.
The May index is especially significant as it marks the first time any city has reached a new all-time price high. Dallas and Denver reached record levels, passing their pre-financial crisis peaks that were set in June 2007 and August 2006.
All 20 cities jumped year-over-year in May, with the 10- and 20-city composites posting their best-year-over-year gains since March 2006.
"Home prices continue to strengthen," says David Blitzer, chairman of the index committee at S&P Dow Jones Indices. "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."
The strongest annual gains belonged to the Southwest and the West. San Francisco’s home prices spiked 24.5% since last May, while Las Vegas was up 23.3% and Phoenix rose 20.6%. Conversely, New York, Cleveland and Washington D.C. were the weakest, up only 3.3%, 3.4% and 6.5% year-over-year, respectively.
Although Atlanta and Phoenix continued to show impressive improvement, their May annual rate dropped to just over 20% compared to April. Detroit saw the most deceleration with a three-percentage point drop.
Month-over-month, before seasonal adjustment, all 20 cities experienced rising prices. On a monthly basis, San Francisco experienced a significant price jump, up 4.3% from April to May. Chicago and Atlanta followed with increases of 3.7% and 3.4%, respectively. Miami and Seattle reported their greatest monthly increases since August 2005 and April 1990.
Surprisingly, Cleveland and Minneapolis dropped slightly after a seasonal adjustment.
"The overall report points to some shifts among various markets: Washington D.C. is no longer the standout leader and the eastern Sunbelt cities, Miami and Tampa, are lagging behind their western counterparts," said Blitzer.
"Home price appreciation is a major plus that's lifting consumer spirits and the economic outlook," analysts at Econoday noted.