By Christopher S. Rugaber Associated Press
WASHINGTON — U.S. home prices rose in May from a year earlier at the weakest pace in 15 months as sales remain modest in the spring buying season.
The Standard &Poor’s/Case-Shiller 20-city home price index, released Tuesday, increased 9.3 percent in May from 12 months earlier. That’s down from 10.8 percent in the previous month and the smallest annual gain since February 2013.
Yearly price gains slowed in 18 of the 20 cities. They accelerated in Charlotte, North Carolina, and were flat in Tampa, Florida.
Home prices soared last fall and winter but have been steadily returning to a more sustainable level this year. Existing home sales have picked up, rising to an eight-month high in June. But they are still 2.3 percent below last year’s level. And an index of signed contracts dipped in June, suggesting sales will cool. At the same time, the number of homes for sale has increased, giving buyers more choices.
After steady gains early last year, home sales have been restrained by weak wage increases and tight credit, particularly for first-time buyers. Mortgage rates also rose last summer, slowing sales.
The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The May figures are the latest available.
Cities in the West and South showed some of the biggest increases. Prices rose 16.9 percent in Las Vegas from a year earlier, the largest gain, followed by a 15.4 percent increase in San Francisco and 13.2 percent in Miami.
Other housing data have painted a mixed picture of the real estate market. While sales of existing homes have picked up, new home sales plummeted in June. And new home construction has fallen for two straight months. That could lead to fewer construction jobs.
Still, home prices have risen steadily since housing began to recover in 2012. The Case-Shiller index has risen 27.3 percent after bottoming out in March 2012. But home prices remain about 17 percent below the peaks reached in the summer of 2006, just before the housing bust.