December 6, 2023

A home for sale in Arlington, Virginia, July 13, 2023.

Saul Loeb | AFP | Getty Images

Home prices rise for fourth straight month in May S&P CoreLogic Case-Shiller Home Price Indexbut regional differences are widening.

The rise comes despite a sharp increase in mortgage rates this month.

On a seasonally adjusted basis, national prices rose 0.7% month-on-month. The index’s 10-city composite rose 1.1 percent, while the 20-city composite rose 1 percent.

National prices are still down 0.5% compared to May 2022, but only 1% below their June 2022 peak.

The 10-city composite index fell 1 percent year-over-year, slightly slower than the 1.1 percent decline in the previous month. The 20-city composite fell 1.7%, the same annual decline as in April.

“U.S. home prices began to fall after June 2022, and the May data support a scenario in which the last month of decline is January 2023,” said Craig Lazzara, managing director at S&P Dow Jones Industrial Average. “Granted, price gains over the past four months could be tempered by higher mortgage rates or a weaker broader economy. But the breadth and strength of the May report is consistent with an optimistic view of the months ahead.”

However, Lazara noted that “regional differences remain significant,” with cities in the so-called “rust belt” outperforming the rest of the country. Chicago prices rose 4.6 percent; Cleveland, 3.9 percent; and New York, 3.5 percent — the best performers. The Midwest replaced the South’s dominance as the most powerful region.

“If that’s an unusual thing for you, it’s for me too. In five years, no city with cold weather has topped the list (that’s Seattle, which isn’t that cold),” Lazara added.

Of the 20 cities in the composite, 10 cities had lower prices for the year ending May 2023 than the year ending April 2023, and 10 cities had higher prices.

The western cities with the biggest price increases were the worst performers in May. Seattle, down 11.3 percent, and San Francisco, down 11 percent, were the worst performers.

Prices are rising again as supply remains low. Current homeowners are reluctant to sell because most are paying less than half of today’s rates on their mortgages. After an initial rise in mortgage rates, demand picked up as buyers appeared to get used to the new normal.

“The housing market remains unaffordable for many buyers, but competition is fierce in some areas due to low for-sale inventory,” said Hannah Jones, research analyst for “Limited inventory of existing homes means many markets are experiencing the competition they’ve experienced over the past few years.”

REVISED: Home prices rose for the fourth straight month in May, according to the S&P CoreLogic Case-Shiller Home Price Index. Earlier versions misrepresented the month number.