With this morning's release of the May S&P/Case-Shiller Home Price we learned that seasonally adjusted home prices were down fractionally month over month and rose across the country over the last 12 months but at a slower pace.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was down -0.2% from the previous month. The nonseasonally adjusted index was up 4.9% year-over-year.

investing.com had forecast a 0.3% MoM seasonally adjusted increase and 5.6% YoY nonseasonally adjusted for the 20-city series.

Here is an excerpt of the analysis from today's Standard & Poor's press release.

“As home prices continue rising, they are sending more upbeat signals than other housing market indicators,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Nationally, single family home price increases have settled into a steady 4%-5% annual pace following the double-digit bubbly pattern of 2013. Over the next two years or so, the rate of home price increases is more likely to slow than to accelerate. Prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust. Housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes. [Link to source]

The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the nonseasonally adjusted data for this illustration.

For an understanding of the home price data over longer time frames, we think a real, inflation-adjusted visualization of the data is an absolute necessity. Here is the same chart as the one above adjusted for inflation using the Bureau of Labor Statistics' Consumer Price Index as the deflator. Among other things, the real version gives a better sense of the dynamics of the real estate bubble that preceded the last recession.