U.S. Home Price Gains Slow in May, Radian Home Price Index Reveals

Home prices across the United States rose at an annualized rate of 4.5 percent in May 2020 from April 2020, according to Radian Home Price Index (HPI) data released today by Red Bell Real Estate, LLC, a Radian Group Inc. company (NYSE: RDN). The Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions.

The Radian HPI also rose 7.8 percent year-over-year (June 2019 to May 2020), which was slightly lower than the year-over-year increase of 7.9 percent recorded last month. Slowing home price growth is not unexpected given the dramatic COVID-19 impact on the ability to enter into and close many real estate transactions.

The Radian HPI is calculated based on the estimated values of more than 70 million unique U.S. addresses each month, covering all single-family property types and geographies.

“Home price gains across the U.S. slowed in May, a month typically known for accelerating activity, however the month also recorded additional reversals in some of the recent, negative real estate transactional data trends,” noted Steve Gaenzler, SVP of Data and Analytics. “Nationally, the weekly counts of properties going 'under contract,' a leading indicator to closings and sales, ended the month with higher levels than in the same period of 2019. In addition, the Mortgage Bankers Association reported that applications for new mortgages were accelerating during the month and that the rate of new forbearance requests had begun to decline towards the end of the month.”

Gaenzler also added that “softer home price appreciation across the U.S. compared to the prior month suggests that the full impact of COVID nationally or locally on home prices may not yet be felt, but we are encouraged by some of our leading indicators.”

NATIONAL DATA AND TRENDS

• Median home price in the U.S. rose to $254,826
• Home prices rose an annualized 5.5 percent over the last three months

Nationally, the median estimated price for single-family and condominium homes rose to $254,826. Across the U.S., home prices nationally rose 5.5 percent over the last three months, slightly lower than the 5.6 percent reported for the three months from February through April. The impact of COVID-19 in May on national markets appears to have been to slow the rate of appreciation, as opposed to a decline in prices. Typically, home prices accelerate their growth momentum into the summer season. At 4.5 percent, the annualized rate reported in May was softer than recent years, but remained positive.