One of the country's leading home price measures continued to push up in May, though gains have now slowed to a single-digit annual pace.
Property analytics firm CoreLogic reported an 8.8 percent year-over-year increase in its May Home Price Index (HPI), marking 27 straight months of annual improvement. Taking out distressed sales, the HPI was up 8.1 percent year-on-year.
May's figure represents another slowdown in the annual rate of home price gains, which are now down almost 3 percentage points compared to only a few months ago.
"The pace of home price appreciation is cooling off quickly as the weather warms up," said Mark Fleming, chief economist for CoreLogic. "The influences of modestly rising inventory and less-than-expected demand are causing price growth to moderate toward our forecasted expectations."
As of the latest report, half of all states and the District of Columbia are now at or within 10 percent of their peak home price appreciation, CoreLogic reports. Meanwhile, 10 states have reached new peaks, including Alaska, Louisiana, Oklahoma, Nebraska, Iowa, South Dakota, North Dakota, Colorado, Texas, and New York.
Looking ahead, the company anticipates home prices (including distressed sales) will rise another 6.0 percent from May 2014 to May 2015, with a 0.8 percent monthly bump predicted for June—down from 1.4 percent in May.
The slowdown in price increases isn't all bad, says CoreLogic CEO Anand Nallathambi, especially as affordability becomes a greater concern.
"While the rapid rise in prices over the past two years has lifted many homeowners out of negative equity, it has also become a negative factor in buying decisions for prospective purchasers weighing affordability concerns," Nallathambi. "As we move ahead, a moderation in home price increases over the next twelve months should help cool things down a bit and keep the housing recovery going."