NEW YORK -- U.S. single-family home prices rose in May, suggesting the housing market recovery continued during the spring buying season though the pace of gains cooled compared to the month before, a closely watched survey showed on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 1 percent on a seasonally adjusted basis, shy of economists' forecast for a 1.5 percent increase. That marked a slower pace than April's 1.7 percent rise.
On a non-adjusted basis, prices rose 2.4 percent.
Compared to last May, prices also fell short of expectations, rising 12.2 percent from a year earlier. Still, it was the biggest annual gain since March 2006, matching a record set in April.
The report was unlikely to alter economists' views that the housing sector's recovery is progressing, making it a bright spot for the economy. The dollar erased losses against the yen, but beyond that, financial markets saw little reaction to the data.
All 20 cities rose on a yearly basis, led by a 24.5 percent surge in San Francisco. Two cities -- Dallas and Denver -- reached record levels, surpassing their peaks reached during the housing boom. It was the first time any city has racked up a new all-time high, the survey said.
"Home prices continue to strengthen," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement.
"The overall report points to some shifts among various markets: Washington, D.C., is no longer the standout leader and the eastern Sunbelt cities, Miami and Tampa, are lagging behind their western counterparts."
A tightening of inventory available for sale, fewer foreclosures and buying from investors has helped push prices higher during the past year-and-a-half as the battered housing sector has gotten back on its feet.
But a potential hurdle has emerged recently in the form of higher mortgage rates, as borrowing costs have risen in the wake of the Federal Reserve's plan to start winding down its economic stimulus later this year if the economy progresses as expected.
Still, rates remain low by historical standards and most economists don't expect them to derail the housing market.
May's home price data likely didn't capture the rise in rates as the contracts to purchase would have been signed before rates began increasing, Bank of America-Merrill Lynch wrote last week.
9 Numbers That'll Tell You How the Economy's Really Doing
Home Prices Heat Up in May as Pace of Gains Cools
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.