House prices rose for the fourth month in a row in May S&P CoreLogic Case-Shiller Home Price Indexbut regional differences are widening.

The gains come despite a sharp jump in mortgage interest rates during the month.

Prices rose by 0.7% month-on-month after seasonal adjustment. The 10-city composite index gained 1.1% and the 20-city composite gained 1%.

Nationally, prices were still down 0.5% compared to May 2022, but are just 1% below their June 2022 peak.

The 10-city composite fell 1% year-over-year, slightly less than the previous month’s 1.1% decline. The 20-city composite fell 1.7%, the same as April’s year-over-year decline.

“U.S. home prices began to decline after June 2022, and the May data supports the claim that the last month of decline was January 2023,” said Craig Lazzara, managing director of S&P DJI. “It’s true that price gains over the past four months could be truncated by rising mortgage rates or general economic weakness. But the breadth and strength of the May report is consistent with an upbeat outlook for the months ahead.”

But Lazzara noted that “regional differences remain striking,” with cities in the so-called Rust Belt outperforming the rest of the country. Chicago prices rose 4.6%; in Cleveland, 3.9%; and New York, 3.5%, the top performers. The Midwest took over from the South as the strongest region.

“If that seems like an unusual occurrence to you, it does to me. It’s been five years since the month a cold-weather city took first place (which was Seattle, which isn’t so cold),” Lazzara added.

Out of a total of 20 cities, 10 cities saw lower prices in the year ending May 2023 compared to the year ending April 2023, and 10 saw higher prices.

Cities in the West fared the worst in May, where prices rose the most. The worst performers were Seattle, down 11.3%, and San Francisco, down 11%.

Prices are rising again because supply is still very low. Current homeowners are reluctant to sell because most are paying mortgage rates that are less than half of today’s rates. Demand has rebounded after the initial jump in mortgage rates as buyers appear to be adjusting to the new normal.

“The housing market remains unaffordable for many buyers, but some areas are experiencing high levels of competition due to low inventory,” said Hannah Jones, analyst for Realtor.com. “Limited existing domestic stocks mean many markets are experiencing competition reminiscent of the last few years.”