U.S. home prices reached a new high in May for the sixth straight month, raising fears of another housing bubble roughly a decade after a previous one burst, The Associated Press reports.
The Standard & Poor’s CoreLogic national home price index, increased 5.6% in May, the latest data available. It is now 3.2% higher than its July 2006 peak, just prior to the last housing downtown.
Some analysts, however, downplay the notion of a new bubble, and the unrelenting price increases may already be cooling sales. Other aspects of the last decade’s housing boom and bust, such as rapid sales increases and surging home building, aren’t happening now.
“Price increases vary across the country, unlike the earlier period when rising prices were almost universal,” David Blitzer, chairman of the Index Committee at S&P, says.
A separate price index maintained by the National Association of Realtors is also rising steadily, though it remains about 9% below its 2006 peak.
The S&P CoreLogic index tracks the same houses over time and is generally considered a better gauge of price changes, while the NAR’s measure is affected by the proportion of higher-priced or lower-priced homes on the market.
