Case Shiller: May home prices rise at modest rate

"There are strong regional tendencies in our Summer housing market report, with cities in the Southeast, the Pacific Northwest, and California performing exceptionally well, while the Northeast and Midwest are lagging behind", said Ten-X EVP Rick Sharga.

"Home prices continue to appreciate across the country", said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, in a statement. To put it simply, Professor Case demonstrated that housing has a substantial impact on the overall economy. "In addition to strong prices, sales of existing homes reached the highest monthly level since 2007 as construction of new homes showed continuing gains", he added.

The S&P Case-Shiller 20-city index rose 1.2 percent for May.

Subscribe to Times of San Diego's free daily email newsletter! Analysts had expected a 1.69% gain over the previous month; June's increase capped a second quarter of monthly sales gains that marked the best quarterly performance in eight years.

He is familiar to so many because his was one-half of the name of an important index for the housing industry-the Case-Shiller Home Price Index.

"The two hottest areas during the housing boom were Florida and the Southwest", he said.

Local prices have been rising by between 8 percent and 10 percent annually for more than a year in the closely watched housing market survey. "Miami and Tampa have recovered in the last few months while Las Vegas and Phoenix remain weak". But the increase in homebuilding hasn't lifted the supply of homes enough to slow price gains. In contrast, prices in San Francisco fell by 1.3 percent.

"Affordability is being partially insulated from higher home prices due to very low borrowing costs", Reynolds said in a research note.

Mortgage rates are near historic lows, which can offset price gains by keeping monthly payments in check.

  • Wendy Palmer