Home sales are up while home prices are down. Case-Shiller’s 20-city adjusted index fell 0.1 percent in May, well under expectations for a 0.4 percent gain. FHFA house price data released last week were also much weaker than expected. Making matters worse is a steep downward revision to April, now at minus 0.2 percent vs an initial plus 0.5 percent. But the trouble is at least limited to April and May as March is revised 1 tenth higher to a very strong 0.9 percent.

Unadjusted data, which are tracked closely in this report, are not revised lower for April, holding at a solid 1.1 percent gain reflecting the heavy housing activity in the spring. The monthly result for May is plus 0.9 percent. Year-on-year, the unadjusted rate is at only plus 5.2 percent, down from an unrevised 5.4 percent in April and making the 6 percent line, which prices had been testing earlier this year, a distant memory.

Seasonal adjustments are heavy in the spring as they cut levels to match lighter activity during the other seasons. Further clouding comparisons is the fact that readings in this report are 3-month averages, not single month results. But the bottom line is very clear, that home prices, despite thin supplies of homes for sale, are softening.