The U.S. housing market is experiencing a gradual cooling, with home price growth slowing for the fourth consecutive month in May. This trend, described as a "slow unwind" of pandemic-era appreciation, is evident nationwide and particularly in markets like Miami, where price increases have moderated.
National Market Slowdown
The S&P CoreLogic Case-Shiller U.S. National Home Price Index saw its year-over-year growth dip to 2.3% in May, a decrease from April’s 2.7%. Month-over-month, the index increased by a modest 0.4%. The 10-city composite index rose 3.4% year-over-year, down from 4.1% in April, and the 20-city composite saw a similar deceleration, moving from 3.4% to 2.8%.
Key Takeaways
- National home price growth continues to decelerate.
- Higher mortgage rates and economic uncertainty are dampening buyer demand.
- Inventory levels are increasing in some markets, shifting favor towards buyers.
- Miami’s home price growth has significantly slowed.
Miami’s Moderating Growth
Miami experienced a notable slowdown in home price appreciation. In May, prices in the city rose by only 0.6% year-over-year, a significant drop from the 1.4% gain recorded in April. This indicates a cooling trend within one of the nation’s previously hottest real estate markets.
Expert Analysis
Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, noted that the slowdown is more than just a reaction to higher mortgage rates. He stated, "It reflects a market recalibrating around tighter financial conditions, subdued transaction volumes and increasingly local dynamics. With affordability still stretched and inventory constrained, national home prices are holding steady, but barely."
Selma Hepp, Chief Economist at Cotality, attributed the weak homebuying season to persistently high mortgage rates and economic uncertainty. She observed that potential buyers are concerned about financial stability, policy shifts, and job security. Despite some markets seeing increased inventory that benefits buyers, overall demand remains muted, leading to weak sales activity and subdued expectations for the remainder of the year.