Home-price gains have leveled off in major cities across the country, though the Portland area has emerged among the metros where prices are growing most rapidly.
Home values climbed 1.1 percent from April to May in 20 major cities around the country, new numbers from the Standard & Poor's/Case-Shiller home price index showed Tuesday. They reached a level 4.9 percent higher than in May 2014.
In Portland, home prices were up 1.4 percent in May, reaching a level 7.4 percent higher than a year ago. Of the 20 cities included in the survey, only Denver, Dallas, Miami, San Diego and San Francisco saw larger year-over-year increases.
The index suggests that home prices have leveled off. But market observers suggest that without an infusion of first-time homebuyers, so far mostly absent from the housing recovery, there's little room for prices to pick up steam.
The perceived strength of the housing market has come from buyers competing for a small number of homes for sale, bidding prices higher. But even as prices have increased, there hasn't been enough new inventory hitting the market to meet demand, and that's constrained sales.
David M. Blitzer, chairman of the index committee, said that first-time homebuyers provide the liquidity for current homeowners to trade up. Until the first-time buyers begin to show up in force, the supply issues will continue, he said.
"As home prices continue rising, they are sending more upbeat signals than other housing market indicators," Blitzer said. "Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate."
A long-expected increase in mortgage interest rates could further hold down home prices, said Stan Humphries, the chief economist at the real estate website Zillow.
"Enjoy summer while it lasts, because in just a few months, things could start getting interesting again," Humphries said.
The Case-Shiller index uses repeat sales of the same property to measure changes in home values over time. Each month's data uses a three-month rolling average, and it's released on a two-month delay.
— Elliot Njus
Home prices in the Portland area and major U.S. metro areas climbed in March, though at a rate that’s slowed from recent months. Prices rose about .9 percent in March across the 20 cities included in the Standard & Poor’s/Case-Shiller home price index released Tuesday. Compared with a year ago, prices were up 12.4 percent. In the Portland area, prices were up 1.3 percent in March and have increased by 11.8 percent from a year earlier. Portland was one of 13 cities in the index where prices are rising at a slower year-over-year rate than they were in March 2013, during the early part of the recovery.
February brought an increase in Portland-area home sales, along with a jump in prices, but it also saw a drop in contracts for future sales, perhaps due partially to a winter snowstorm that hammered the region. According to numbers released Wednesday by the RMLS, 1,467 Portland-area homes changed hands in February. That’s 6.6 percent more transactions than a year earlier and 5.1 percent more than in January.
But the number of home sale contracts reached in February dropped to 1,848, a decline of 13.2 percent from a year ago and 8.8 percent from January. According to RMLS the amount of times real estate agents accessed lockboxes on homes for sale dropped 36 percent the weekend of the snow storm.