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What Case-Shiller calls “January” numbers should really be called “December” numbers because they represent November-January sales. We won’t get the January numbers, for example, until the end of March and then the January numbers are really the November-January numbers because Case-Shiller uses a 3-month moving average. So what Case-Shiller calls “January” numbers should really be called “December” numbers because they represent November-January sales.
The influx of high-earning remote workers saw home prices in boomtowns, like Boise and Idaho Falls, detach from local incomes. While national inventory levels on Realtor.com are up 46.8% year-over-year, the picture varies significantly by market. Cities like Austin and Phoenix have seen their respective inventory levels soar 160.7% and 176%. Meanwhile, markets like Chicago and New York City remain essentially unchanged. Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more.
Using 1990 as the Base YearHouse Prices in January 1990 = 100
Tampa, Florida, Miami and Dallas saw the highest annual gains among the 20 cities in July, with increases of 31.8%, 31.7% and 24.7%, respectively. Washington, D.C., Minneapolis and San Francisco saw the smallest gains, but were still well above year-ago levels. Among the country's 400 largest housing markets, 364 markets remain below pre-pandemic inventory levels. Using an index of house prices instead of the actual dollar prices makes it easier to compare house price appreciation between the 20 cities. The Case-Shiller Home Price Index is the most accurate way to look at house price appreciation in a city, between cities, and nationally. Another recent report from the National Association of Realtors showed home prices softening dramatically from June to July.
In fact, new listings on Realtor.com are down 17.25% on a year-over-year basis. Many buyers who would normally be looking to move up to a bigger house have postponed the switch because they don't want to give up their fixed 2% or 3% mortgage rates they have for their current house. On the housing demand front, things remain slumped with mortgage purchase applications (down 38% year-over-year) currently just below their lowest point during the 2000s housing crash. On one hand, if financial conditions ease and mortgage rates fall in 2023, homebuyer demand would increase. On the other hand, the pandemic's housing demand boom could've had a pull-forward effect that results in a slower than expected post-pandemic housing market. In addition, average and median house prices are more affected by the mix of houses sold.
S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index
Perhaps in the future, I’ll use that state-level quarterly data to estimate personal income at the metro level for the most recent months. But that’s would be a big project to forecast Per Capita Personal Income by metro by month. The Case-Shiller National Home Price Index is a composite index of the single-family residential real estate values in 9 US Census divisions. The Case-Shiller method of calculating the home price index adjusts the weighting for the quality of sold homes. The Case-Shiller indices are seen as one of the most reliable measures of housing price trends in the US.
"Given the prospects for a more challenging macroeconomic environment, home prices may well continue to decelerate”, Craig J. Lazzara, Managing Director at S&P DJI said. September brought about high interest rates and slowing sales, which continued to slow home price growth annually. While buyers are stepping aside waiting for more affordable prices and rates – causing the slowdown on price growth – would-be sellers are sticking their ground and holding tight to the inventory they currently own. As a result, prices might not continue to plunge down as much as some projections anticipate— as the available inventory of homes on the market is constrained. Every quarter, Moody’s Analytics assesses whether local fundamentals, including local income levels, can support local house prices. Thesefrothy markets include places like Boise("overvalued" by 74%) and Austin ("overvalued" by 61%).
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In January 2021, I switched from using CPI-U as the inflation deflator to using “CPI-U Less Shelter”. Since Case-Shiller itself directly measures home price inflation, it’s better to use a deflator that doesn’t also incorporate housing price changes. Real home prices were a bit higher using “CPI-U Less Shelter” as the deflator. For example, using the year 2000 as the baseline, the inflation-adjusted Case Shiller Index for the USA in November 2020 was 151 using CPI-U, and 159 using CPI-U Less Shelter. Despite running 3 months behind, the Case-Shiller Home Price Index remains the most accurate measure of house price appreciation.
The CoreLogic Case-Shiller® Home Price Indexes include Federal Housing Finance Agency indexes for missing markets and time periods—ensuring the most complete coverage possible of all U.S. Census divisions, states, metropolitan areas, and micropolitan divisions. Down-weight pairs with long intervals between sales and reduce the influence of extreme price changes. National Index posted a month-over-month decrease of -0.9%, and the 10-City and 20-City Composites both posted decreases of -1.3%. National Index posted a month-over-month decrease of -0.2%, and the 10-City and 20-City Composites posted decreases of -0.5% and -0.4%, respectively. National Index posted a -0.3% month-over-month decrease in July, while the 10-City and 20-City Composites both posted decreases of -0.8%.
The S&P CoreLogic Case-Shiller 20-city home price index in the US increased 13.1% year-on-year in August of 2022, the least since February of 2021, and below forecasts of 14.4%. It marks a fourth consecutive month of slowing home price growth, compared to a downwardly revised 16% jump in the previous month. Meanwhile, the National Composite Index rose by 13% in August, down from 15.6% in July, the largest deceleration on record.
Since there’s a smaller percentage of principal and interest in each monthly mortgage payment, when mortgage rates fall, the overall monthly mortgage payment falls less. The larger the down payment, the smaller the monthly payments which means falling mortgage rates have a smaller impact on the monthly mortgage payment price of a house when down payments are larger. Heading forward, John Burns Real Estate Consulting expects inventory to rise further next spring. In terms of national home prices, the research firm expects a 20% to 22% peak-to-trough decline if affordability remains hampered by 6% mortgage rates next year. About This Data The S&P/Case-Shiller Home Price Indices measure the average change in the total value of all existing single-family housing prices in a particular geographic market.
The 20-City composite, which adds regions such as the Seattle metro area and greater Detroit, gained 16.1%, down from 18.7% in the previous month. July's year-over-year gains were lower compared with June in each of the cities covered by the index. Tampa, Miami and Dallas saw the highest annual gains among the 20 cities in July, with increases of 31.8%, 31.7% and 24.7%, respectively. While Morgan Stanley researchers don't think tight inventory will prevent home prices declines, they do believe tight inventory levels will prevent a 2008-style crash. The repeat-sales method is a manner of calculating changes in the sales price of the same piece of real estate over specific periods of time. But the key to the reliability of the indices is what they represent.
Moody's Analytics and CoreLogic® have partnered to create the most trustworthy and authoritative U.S. house price forecasts available. Case-Shiller® Indexes are market-specific and accurately track historical residential house prices over time. They measure the total market, not just prices of homes purchased through conforming loans. Someday, I would like to adjust the Case-Shiller Index for Per Capita Personal Income to see how house prices are doing relative to income. Data on personal income is available quarterly at the state level.
July’s year-over-year price change was positive for each one of the 20 cities with a median gain of 15.0%, but in every case, July’s gain was less than June’s,” says Lazzara. Tampa (up 31.8%) narrowly edged Miami (up 31.7%) to remain at the top of the league table for the fifth consecutive month, with Dallas (up 24.7%) holding on to third place. All 20 cities reported lower price increases in the year ending July 2022 versus the year ending June 2022. For fun, be sure and check out Denver and Portland house prices during the 1990s. House prices in New York and Boston peaked in the late 1980s and house prices in California and Washington DC peaked a bit later, right before the S&L recession started in 1990.
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