U.S. home prices increased in May when compared to last year’s figures, but the gains have slowed to a more normal pace. National data provider CoreLogic said Tuesday that prices increased 8.8 percent in May compared with 12 months earlier. The pace of gains has slowed as more houses have come onto the market. On a month-to-month basis, prices rose 1.2 percent from April to May.
Prices increased the most in Western states, including Hawaii, California and Nevada. Home sales began to stall in the middle of 2013 after double-digit price increases and higher mortgage rates made real estate less affordable for many people. But sales rose last month as price gains have moderated and mortgage rates have dipped.
Sales of existing homes climbed 4.9 percent in May to a seasonally adjusted annual rate of 4.89 million homes, according to the National Association of Realtors. However, sales are down 5 percent year-over-year. Sluggish sales, in turn, will slow annual price gains this year to a more normal rate of appreciation, roughly 5 percent or 6 percent, economists predict.
Prices rose in the last 12 months in every state, CoreLogic said. The states with the biggest price gains were Hawaii, 13.2 percent; California, 13.1 percent; Nevada, 12.6 percent; Michigan, 11.8 percent; New York, 11 percent; Georgia, 10.3 percent; and Oregon, 10.1 percent. Average prices have risen nationwide for the past 27 months, but homes nationwide are still 13.5 percent below their peak values in April 2006. Ten states have exceeded their previous peaks, including Alaska, Louisiana, Oklahoma, Nebraska, Iowa, South Dakota, North Dakota, Colorado, Texas and New York.