The latest S&P CoreLogic Case-Shiller U.S. National Home Price Index reported a 5.5% annual gain in April, down from 5.6% the previous month. Both the 10 City Composite and 20 City Composite figures showed a lower annual gain than the previous month, down 0.3% and 0.2% respectively.

Could we be seeing a slow down? Well its unlikely right now. “Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up” says David M. Blitzer Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue. “The question is not if home prices can climb without any limit; they can’t. Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash. Housing starts are trending higher and rising prices may encourage some homeowners to sell. Moreover, mortgage default rates are low and household debt levels are manageable”.

Regards,