The S&P/Case-Shiller home price index, posted a 9.3%
annual increase in its May reading, down from the 10.8% rate in April. The rate
of increase was as high as 13.7% in November before slowing every month since.
The good news for homeowners is that the index has now been
up every month over the last two years -- after posting drops almost every
month over the previous five years. And some experts say the current growth is
better for the market, because rapid price increases can keep some buyers on
the sidelines.
Prices rose in all 20 cities measured by the index, and nine
of those markets posted double-digit percentage gains. The fastest growth was a
15.4% year-over-year jump in San Francisco. Most of the big gains were in
markets in California and Florida, as well as Las Vegas. All of those markets
were hit particularly hard by the housing bust that followed the home price
bubble in the middle of the last decade.
A drop in mortgage foreclosures and unemployment, low
mortgage rates and pent-up demand for people who had wanted to buy homes
have combined to help lift home prices. A recovery in home sales and prices has
been a major driver of the rebound of the U.S. economy so far this year, as the
jump in prices has increased household wealth. The price increases and low
mortgage rates also helped many homeowners refinance their mortgages and
lower their home payments.
Despite the two years of increases, prices are still 17%
below the peak reached at the height of the housing bubble in early 2006.
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