Home prices fell unexpectedly in May, according to the S&P/Case-Shiller home price index.
Prices fell 0.2% month-on-month on a seasonally adjusted basis, and rose 4.9% year-over-year.
Economists had estimated that home prices rose 0.3% month-over-month, unchanged from April, and climbed 5.6% year-on-year, according to Bloomberg.
Prices rose 1.1% month-over-month when not seasonally adjusted. In the release, S&P Dow Jones Indices’ David Blitzer said: “As home prices continue rising, they are sending more upbeat signals than other housing market indicators.”
Blitzer continued: “Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages.”
However, Blitzer noted that first time homebuying is still weak, raising concerns about inventory in the market.
In a statement, Zillow chief economist Stan Humphries said, “Mortgage rates won’t remain in this holding pattern for much longer, and will add further downward pressure on home value appreciation as soon as they start rising. Enjoy summer while it lasts, because in just a few months, things could start getting interesting again.”
Here’s the latest chart of the S&P/Case-Shiller indices: