House prices rose by just 0.1% m/m in May on the Case-Shiller index, which together with a slowdown on the FHFA index indicates that the collapse in sales caused by the coronavirus is now weighing on prices. The rapid recovery in housing demand more recently argues against an outright fall in home values, but with unemployment set to be elevated for some time we expect annual growth will continue to slow, to around 0% by the second quarter of next year.
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