The average price of existing single-family homes sold in King, Snohomish and Pierce counties was the same in May as in April, according to the S&P/Case Shiller index. Over the past 12 months, the average price in the Seattle area was up 7.4 percent, the same pace as April.

Share story

Home prices in the Seattle metro area hit a wall in May, traditionally one of the year’s busiest shopping periods, posting weaker than expected gains, according to the S&P/Case-Shiller index released Tuesday.

The average price of existing single-family homes sold in King, Snohomish and Pierce counties was the same as in April, after seasonal fluctuations are taken into account. That was weaker than April’s 0.6 percent average gain over March.

Over the past 12 months, the average price in the Seattle area was up 7.4 percent, the same pace as April, according to S&P Dow Jones Indices, publisher of the index. The volume of existing-home sales in May was higher than previous months and the busiest May since 2006.

Home prices in the 20 metro areas covered by the index posted a 4.9 percent gain over the year, compared with April’s 5 percent annual increase. On a seasonally adjusted basis, the 20-city index declined in May over the month by 0.2 percent, a slowdown in the market after no growth in April.

“First-time homebuyers are the weak spot in the market,” David Blitzer, chairman of the index committee, said in a statement.

“First-time buyers provide the demand and liquidity that supports trading up by current homeowners. Without a boost in first-timers, there is less housing market activity, fewer existing homes being put on the market, and more worry about inventory,” he said.

Denver, San Francisco and Dallas posted the highest price gains over the year among the 20 metros areas. Denver’s average home price rose 10 percent annually.

While the Case-Shiller index shows local home prices posted a 7.4 percent average gain in May over the past 12 months, the most affordable homes saw the biggest annual jump: Homes that sold for under $296,017 in May gained 10.3 percent, while homes that sold for over $471,764 increased by 6.7 percent, Case-Shiller data shows.

The slowdown in annual price gains affects the lower and upper price tiers, while homes selling in the middle tier saw gains accelerate. In May, these homes gained 7.8 percent over the year, up from 7.1 percent in April.

Home prices across the 20 metros are still about 13 percent below their summer 2006 peak levels. In the Seattle area, the average price is about 6 percent below its summer 2007 peak.

A sharp decline in distressed mortgages has helped put a floor under home prices.

California-based CoreLogic reported Tuesday that 2.18 percent of mortgaged homes in King and Snohomish counties were delinquent in May by 90 days or more, the lowest rate in at least six years. That figure includes homes in the foreclosure process and bank-owned homes.

A year ago, 3.26 percent of the area’s homes with mortgage debt were classified as delinquent. The region’s 90-day delinquency rate peaked in July 2012 at 6.68 percent, according to CoreLogic.

While Case-Shiller’s index is derived from analyzing repeat sales of a subset of homes and includes foreclosure resales, Seattle-based Zillow maintains an index that tracks the entire housing stock and doesn’t include resales of foreclosed homes.

Zillow’s home-value index showed a more moderate May price gain than Case-Shiller of 6.9 percent over the year. The median value — half are above, half are below — in May of all single-family homes in the tri-county Seattle area was $369,300, Zillow reported.

“It’s been a slow, languid summer for home values, with annual growth rates having pretty much leveled off over the past few months and mortgage interest rates in a kind of holding pattern,” said Zillow Chief Economist Stan Humphries in a statement. “But consistent slowing in the rate of seasonally adjusted month-over-month growth in the Case-Shiller indices will eventually be reflected as slowdowns in year-over-year appreciation, too.”

Rising mortgage rates are expected to have some impact on the housing market.

These rates are not as important to first-time homebuyers as the size of down payments, Blitzer said, citing research by the Federal Reserve Bank of New York.

“The difference between a 5 percent and 20 percent down payment, particularly for people who currently rent, has a huge impact on buyers’ willingness to buy a home,” he said.

Zillow’s Humphries said rising mortgage rates will put downward pressure on home-value appreciation as soon as they begin rising.

“Enjoy summer while it lasts, because in just a few months, things could start getting interesting again,” he said.