Charlotte-area home prices rose 4.7 percent in May from a year ago as price gains continue to rise at a slower pace nationwide, Standard & Poor’s/Case-Shiller report showed Tuesday.
It was the 27th month in a row of annual gains for the Charlotte region, the widely watched report on existing home sales showed.
Nationwide, home prices have posted annual gains for 24 months in a row, but the pace has been falling since December. May’s 9.3 percent rise in a composite index of 20 cities marked the lowest annual increase since February 2013.
The slower pace of appreciation comes as potential homebuyers find it tougher to get a mortgage than before the housing downturn, preventing them from taking advantage of low interest rates, David Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, told the Observer Tuesday.
“When you can get loans, you probably have to do 20 percent down,” he said. “At the peak of the boom, there was zero percent down in some cases.”
In Charlotte, the pace of annual appreciation has also been slowing in recent months, although May reversed that trend as the average gain was higher than April’s 4.5 percent. Charlotte was the only U.S. city out of the 20 to post higher annual appreciation from April to May.
Blitzer said he could not pinpoint a reason for Charlotte bucking the trend. Overall, he said, Charlotte’s housing market has been fairly stable as the economy in the Southeast fares better than some other parts of the U.S.
“I think during the last few years, Charlotte’s economy has grown nicely,” he said. “It’s probably a little bit ahead of the rest of the country. That’s helped stabilize housing.”
The housing market nationwide continues to be mixed after harsh winter weather got the year off to a slow start.
On Monday, the National Association of Realtors reported that pending home sales slowed in June after three consecutive months of solid gains.
The association said the housing market is stabilizing but continues to face challenges as supply shortages persist in parts of the country, wages are flat and potential buyers are discouraged by difficulty in obtaining mortgages.
Tight supplies of homes on the market have been credited as a main driver of sizable annual price gains in Charlotte and elsewhere over the past year or so.
Supplies have risen in Charlotte since the start of the year, according to the Charlotte Regional Realtor Association. But as of June, the latest month for which data are available, inventory remained below a six-month supply, the level considered to be a balanced market.
The Case-Shiller report is based on home sales that closed in May, which likely covers purchases that went under contract in March or April.
In Charlotte and nationwide, home prices continue to be below peak levels reached before the downturn. Charlotte prices are down 6.2 percent from the peak in August 2007. Prices nationwide are down 17.4 percent from the peak in July 2006.
Case-Shiller does not report on sales of new homes.