The 20-City Case-Shiller Index rose 1.0 percent in May, the second consecutive increase after eight consecutive months of decline. Seventeen of the 20 cities in the index experienced increases in housing prices, with the biggest increases in Washington, D.C., Minneapolis and Boston. The only cities that saw declines were Tampa Bay, Las Vegas and Detroit.
The 2.4 percent price increase in D.C. continued a pattern, as prices have now risen at a 10.7 percent annual rate over the last three months and are up 1.3 percent over the last year. The 2.6 percent price jump in Minneapolis, however, is the most surprising since prices had been falling sharply in the city. But this also raises the possibility that the increase is simply a result of quirks in measurement.
The Census Department will release data on vacancy rates later this week, which will give us more information on the overall state of supply and demand in the housing market. The recent movement in rents provides no reason for believing that there is any underlying tightening of the market. Owners' equivalent rent is rising at just over a 1.0 percent annual rate.
For more, read the latest Housing Market Monitor.