Home prices were positive for the Chicagoland housing market in May’s Case-Shiller
Home prices in the Chicagoland housing market rose 1.3 percent from April to May, and 2.2 percent from May 2014, according to the latest Case-Shiller Home Price Indices from Standard & Poor’s.
As with previous months, Chicagoland’s yearly price growth was modest; the region’s 2.2-percent increase was tied for the third-weakest among large metro areas. On a monthly basis, however, Chicagoland’s home prices were relatively strong, with its 1.3-percent rise just behind Boston’s nation-leading 1.5 percent.
National Home Prices Remain Strong
On a national basis, the Case-Shiller offered no surprises, as home prices continued in the steady manner that has defined 2015’s housing market:
- The 10- and 20-City Composites rose 4.7 and 4.9 percent, respectively, from where they were a year ago.
- The National Home Price Index, which covers all nine U.S. census divisions, rose 4.4 percent year-over-year.
- On a monthly basis, the 10- and 20-City Composites both rose 1.1 percent; when Standard & Poor’s applied seasonal adjustments, though, both composites were down 0.2 percent.
- Denver, San Francisco and Dallas were at the top of the pack, with their home prices rising 10, 9.7 and 8.4 percent, respectively, from where they were a year ago.
The Home Price Anomaly
David M. Blitzer, the managing director and chairman of the Index Committee at S&P Dow Jones Indices, said that home price gains contrast with both economic fundamentals and other housing measurements.
“As home prices continue rising, they are sending more upbeat signals than other housing market indicators,” Blitzer said. “Prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust. Housing starts are only at about 1.2 million units annually, and only about half of total starts are single-family homes. Sales of new homes are low compared to sales of existing homes.”
Such inconsistencies, Blitzer noted, create further strain on first-time homebuyers, who are already experiencing difficulties in today’s housing market.
“First-time homebuyers are the weak spot in the market,” Blitzer said. “First-time buyers provide the demand and liquidity that supports trading up by current home owners. Without a boost in first timers, there is less housing market activity, fewer existing homes being put on the market and more worry about inventory.”