Chicago sees biggest jump in home prices in May

Home prices continued to climb sequentially in May even as mortgage rates likewise pushed higher.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, edged up 0.7% monthly in May after seasonal adjustment, compared to a 0.6% monthly increase in April.

In May, the 10-City Composite and 20-City Composite indexes posted month-over-month gains of 1.1% and 1.0%, respectively, after seasonal adjustment.

The only metro area in either composite to register a decline was Phoenix, were prices ticked down 0.1% sequentially.

On a yearly basis, the 10-City Composite index declined by 1.0%, compared to a 1.1% decrease in the previous month. The 20-City Composite index posted a 1.7% decline year over year, the same as in the preceding month.

Chicago climbed to the top spot in the index, notching a 4.6% yearly price increase, followed by Cleveland with a 3.9% increase and New York with a 3.5% increase in price.

"Regional differences continue to be striking," said Craig Lazzara, managing director at S&P Dow Jones Indices. "This month's league table shows the 'Revenge of the Rust Belt.'"

Chicago at the top spot is an "unusual occurrence" as a "cold-weather city" occupies the spot for the first time in five years, he added.

Seattle continued to be the worst performer with an 11.3% decline in prices year over year.

New, existing home sales fall in June

In June, new home sales declined 2.5% from May's downwardly revised level, sliding to a seasonally-adjusted annual rate of 697,000 units, according to data from the federal government. Nevertheless, it was still 23.8% higher than the June 2022 estimate of 563,000 units.

Almost all US regions, except the Midwest, registered a yearly increase in new home sales. The Northeast continued to post the biggest increases in new home sales at 141.2% year over year and 20.6% month over month.

Existing home sales across the US fell 18.9% year on year and 3.3% sequentially to a seasonally-adjusted annual rate of 4.2 million in June, according to data from the National Association of Realtors.

"There are simply not enough homes for sale," National Association of Realtors Chief Economist Lawrence Yun said in a July 20 news release. While home sales dropped, prices "have held firm" in most parts of the US.

"Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month," Yun said.

All four regions in the US saw a yearly decline in existing home sales, with the steepest decline in the West at 22.7%.

The Northeast recorded a monthly 2.0% increase in existing home sales to a seasonally-adjusted annual rate of 510,000 units.

– Set email alerts for future Data Dispatch articles. – Read some of the day's top real estate news and insights from S&P Global Market Intelligence.

US homebuilders expected to notch sequential sales gains in Q2

Home sales in the second quarter are expected to be higher on a sequential basis for most US homebuilders, but weaker on a yearly basis.

US homebuilders are expected to register a 4.0% quarterly growth in home sales in the second quarter. But while homebuilders are expected to see 4.0% growth on a sequential basis, sales are projected to fall 11.4% from the same period a year ago, according to S&P Global Market Intelligence data.

Out of 15 select US homebuilders, 10 are expected to log higher home sales compared to the first quarter, while only two are expected to do better than the 2022 second quarter.

Texas-based LGI Homes Inc. is expected to log the highest quarterly increase in home sales in the second quarter. The mean estimated home sales for the company stand at $643.5 million.

Homebuilders' one-year stock returns edges down

As of July 25, the median one-year total stock return of all US homebuilders was 74.6%, down compared to an industry median of 84.9% as of June 29, Market Intelligence data shows.

Plano, Texas-based Green Brick Partners Inc. continued to be the best-performing stock, with a one-year total return of 123.6%.

Matawan, NJ-based Hovnanian Enterprises Inc. took the No. 2 position with a one-year total return of 113.2%.

Top mortgage lenders

Pontiac, Mich.-based UWM Holdings Corp. remained the top US residential mortgage lender, with $20.80 billion in mortgages through April.