Real house prices decreased 0.7 percent between April 2019 and May 2019, according to First American Financial Corp.’s latest Real House Price Index (RHPI).
Additionally, the RHPI found real house prices declined 3.7 percent between May 2018 and May 2019. As a result, First American said how much one can buy based on changes in income and interest rates increased 1.3 percent between April 2019 and May 2019, and 9.3 percent year-over-year.
“Later this week, the Federal Open Market Committee will convene and likely announce a rate cut. The first Fed rate cut since December 2008 will trigger industry and media speculation about mortgage rates declining further,” First American Chief Economist Mark Fleming said in a release. “While changes to the federal funds rate don't directly influence mortgage rates, a rate cut will indicate concern about possible economic weakness and that may increase demand for long-term Treasury bonds, which mortgage rates follow closely.”
First American said the four states with the greatest year-over-year increases in the RHPI in May were Wisconsin (+1.5 percent); Maryland (+0.2 percent); New Hampshire (+0.2 percent); and Rhode Island (+0.1 percent).
The five states with the greatest year-over-year decreases in the RHPI in May were North Dakota (-8.5 percent); Wyoming (-8 percent); California (-7.1 percent); Arkansas (-5.8 percent); and New Mexico (-5.7 percent).
According to the RHPI, the five markets with the greatest year-over-year increases in the RHPI in May were Providence, R.I. (+2.2 percent); Milwaukee (+1.1 percent); Columbus, Ohio (+0.7 percent); Detroit (+0.7 percent); and Las Vegas (+0.1 percent).
The five markets with the greatest year-over-year decreases in the RHPI in May were San Jose, Calif. (-13.9 percent); Seattle (-9.4 percent); San Francisco (-7.8 percent); Portland, Ore. (-7.7 percent); and Riverside, Calif. (-7 percent).