U.S. Home Prices Gain 0.7% in May; Low-Rates, Unemployment Keep Supplies Down

U.S. home prices continued to rise as low rates and improving unemployment kept inventories thin in May.

The Federal Housing Finance Agency (FHFA) said that prices rose 0.7 percent in May on a seasonally-adjusted basis. Economists were looking for a gain of 0.8 percent, according to Bloomberg-compiled data.

House prices rose 7.3 percent in May from the same period last year. The U.S. index is 11.2 percent below its April 2007 peak and its roughly in-line with prices from January 2005.

It was the sixteenth consecutive month of pricing gains, the FHFA said.

The FHFA also said, For the nine census divisions, seasonally adjusted monthly price changes from April to May ranged from -1.5 percent in the East South Central division to +1.8 percent in the South Atlantic division, while the 12-month changes ranged from +2.7 percent in the East South Central division to +15.8 percent in the Pacific division.

SPDR S&P Homebuilders (NYSE: XHB), iShares Dow Jones US Home Construction (NYSE: ITB), and many housing developers are up on Tuesday's session.

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