Us house prices soften for fifth month in a row

US house prices softened in May for the fifth month in a row, according to new statistics from Clear Capital.

The firm's latest rport reveals that yearly house price growth slowed to 9.2 per cent, as the recovery enters a phase of moderation. By year’s end, home prices are expected to normalize in the sub-5 per cent annual growth range

As a result, rates of price growth around the country are significantly varied, says Clear Capital, even within local areas. When stacked up against other major metro markets, Cleveland has the largest variation in ZIP code performance. The top performing Cleveland ZIP saw 42.3 per cent annual growth, while its lowest performer saw -23.3 per cent.

"It’s no surprise that the spring buying season isn’t moving the needle this year," says Dr. Alex Villacorta, vice president of research and analytics at Clear Capital. "The rising price floor in the low tier sector of the market has squeezed investor returns, thereby removing a key demand segment. We don't expect to see a large pop in prices through the summer buying season. It's likely we'll keep chugging along at our current pace, somewhere around 1 per cent quarterly gains for the rest of the year.

"Considering the number of key housing fundamentals that remain stressed, like millions of borrowers still underwater, high levels of student debt, potential borrowers with less than perfect credit, and a job market that is still recovering, we don’t expect a market with waning investor demand to withstand any eye-popping rates of growth," Dr. Villacorta adds.

"Although it’s not a quick fix to the larger housing problem, home price moderation is really a healthy move for the market overall."

"Good deals do exist, but you need to work harder to find them."