Home prices were positive for the Texas housing market in May’s Case-Shiller
Home prices in the Dallas housing market rose 0.9 percent from April to May, and 8.4 percent from May 2014, according to the latest Case-Shiller Home Price Indices from Standard & Poor’s.
The Case-Shiller does not track home prices here in Houston, but its robust measurements for Dallas are consistent with Houston’s market. One thing to note, though, is Dallas’ relatively weak monthly price growth. Though is yearly growth of 8.4 percent was the third best in the nation, its 0.9 percent monthly growth suggests that price may be slowing down now in 2015.
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.”