U.S. home prices rose 1.1% year over year in May, according to the S&P Cotality Case-Shiller Home Price Indices released July 28 by S&P Dow Jones Indices, with Chicago and New York posting the strongest annual gains among the 20 metro areas the index tracks while several Western and Sunbelt markets kept falling.
The S&P Cotality Case-Shiller U.S. National Home Price Index climbed 0.6% month over month on a non-seasonally-adjusted basis in May and was up 1.1% from a year earlier. The 10-City Composite rose 2.4% annually and 0.9% for the month; the 20-City Composite rose 1.6% annually and 0.9% for the month. On a seasonally adjusted basis, the picture was flatter: the national index slipped 0.05% for the month, while the 10-City and 20-City composites edged up 0.3% and 0.15%, respectively.
Price performance varied sharply by region. Chicago led all 20 tracked metros with a 6.9% annual gain, followed by New York, up 4.2%, and Cleveland, up 3.1%. At the other end, Las Vegas posted the steepest annual decline among the 20 cities at 1.9%, followed by Seattle and Denver, both down 1.8%, and Tampa, Fla., down 1.6%.
The Case-Shiller indices track repeat sales of the same single-family homes over time using a three-month rolling average, which smooths month-to-month volatility but means the May reading reflects sales that closed, on average, across March, April and May. That lag is one reason the index can move differently than faster-turnaround measures such as pending-sales counts.
Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices, said the May figures show home values continuing to lose ground once inflation is factored in. “May’s data suggests U.S. home prices continue declining in real terms, with inflation at 4.2%,” Kaufman said. With headline inflation running well above the national index’s 1.1% nominal annual gain, the real, inflation-adjusted value of a typical home has been falling even as the sale-price figure ticks higher.
Kaufman also pointed to a widening regional split, saying “geographic dispersion persists” between the Northeast and Midwest, where prices are outperforming, and the West and Sunbelt, where several major metros are now posting outright annual declines. She floated a possible explanation tied to return-to-office mandates, suggesting they may be supporting demand in traditional urban centers such as Chicago and New York relative to Sun Belt metros that drew heavy in-migration during the pandemic-era relocation wave.
The index release also noted that mortgage rates rose to roughly 6.5% in May, extending an affordability squeeze that has weighed on buyer demand throughout 2026. Higher borrowing costs combined with elevated consumer-price inflation have left many prospective buyers facing higher effective housing costs even in metros where nominal price growth has cooled. A buyer financing a median-priced home at 6.5% pays substantially more in monthly principal and interest than the same purchase would have cost at the sub-6% rates seen briefly in late 2025 and early 2026, even if the sale price itself hasn’t moved.
The 20-City Composite is the figure most widely cited by economists and market watchers because it covers the broadest set of major metros, while the 10-City Composite is a narrower, longer-running series drawn only from the largest markets tracked since the index’s earliest years. The national index folds in smaller metros and rural areas not captured by either composite, which is one reason its annual gain, at 1.1%, trails both composites this month.
What it means
Verified facts: nationally, home prices as measured by Case-Shiller rose modestly in nominal terms in May, but the annual gain trails the pace of consumer-price inflation, and price trends diverge widely by region, with Midwest and Northeast metros outperforming Western and Sunbelt markets.
S&P’s interpretation: Kaufman’s comment linking regional performance to return-to-office mandates is the firm’s own read of the data, not an established causal finding, and RealtyWire is presenting it as attributed analysis rather than fact.
RealtyWire analysis: the divergence between nominal price gains and negative real returns adds to evidence that affordability, not price growth alone, remains the dominant constraint on the housing market as rates hold near 6.5%. That trend echoes the pattern in First American Data & Analytics’ June price data, where inventory constraints rather than demand strength were cited as the main driver of price acceleration.
What to watch
The next Case-Shiller release, covering June data, is due in late August and will show whether Chicago and New York’s outperformance persists or whether softening in Western and Sunbelt metros deepens. Also worth tracking: whether new-home price trends, which have moved in a different direction in recent months as builders cut prices to move inventory, begin to converge with or diverge further from the existing-home price trends captured in this index.
