US house prices posted a drop in May – reflecting the early impact of the coronavirus shutdowns on the housing market in late March and throughout April.

House prices nationwide were 0.3% lower than in April but remained 4.9% higher than a year ago, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI).

A decline in the number of transactions driving the HPI was the reason for the slight month-over-month drop in May, according to Lynn Fisher, deputy director of the division of research and statistics at FHFA.

“The May HPI results are based on contracts for sale signed in late March and throughout April, which was a period when many states announced stay-at-home orders,” Fisher said. “The number of transactions powering the FHFA HPI in May was down by just over 30% compared to a year ago, reflecting the early effects of COVID-19 shutdowns.  Based on the rebound in mortgage applications for home purchases and pending home sales in May, we expect the number of transactions increased somewhat in June.”

On a seasonally adjusted basis, monthly house price changes for the nine census divisions varied from -1% in the New England division to +0.1% in the South Atlantic division. The 12-month changes were positive in all division, ranging from +3.7% in the New England division to +6.3% in the Mountain division.