Home Price Surge Continues In February, Led By Western States

With today's release of the February S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.83% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.3% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.83% from the previous month. The nonseasonally adjusted index was up 6.8% year-over-year.

Investing.com had forecast a 0.7% MoM seasonally adjusted increase and 6.3% YoY nonseasonally adjusted for the 20-city series.

Here is an excerpt from the analysis in today's Standard & Poor's press release.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.3% annual gain in February, up from 6.1% in the previous month. The 10-City Composite annual increase came in at 6.5%, up from 6.0% in the previous month. The 20-City Composite posted a 6.8% year-over-year gain, up from 6.4% in the previous month.

Seattle, Las Vegas, and San Francisco continue to report the highest year-over-year gains among the 20 cities. In February, Seattle led the way with a 12.7% year-over-year price increase, followed by Las Vegas with an 11.6% increase and San Franciscowith a 10.1% increase. Thirteen of the 20 cities reported greater price increases in the year ending February 2018 versus the year ending January 2018.

“Home prices continue to rise across the country,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The S&P CoreLogic Case-Shiller National Index is up 6.3% in the 12 months through February 2018. Year-over-year prices measured by the National index have increased continuously for the past 70 months, since May 2012. Over that time, the price increases averaged 6% per year. This run, which is still ongoing, compares to the previous long run from January 1992 to February 2007, 182 months, when prices averaged 6.1% annually. With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue." [Link to source]

The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.

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The next chart shows the year-over-year Case-Shiller series, again using the seasonally adjusted data.

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Here is the same year-over-year overlay adjusted for inflation with the Consumer Price Index owners' equivalent rent of residences.

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For a long-term perspective on home prices, here is a look at the seasonally and inflation-adjusted Case-Shiller price index from 1953, the first year that monthly data is available. Because the CPI owners' equivalent rent of residences didn't start until 1983, we've used the broader seasonally adjusted Consumer Price Index.

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To get an even better idea of the trend in housing prices over long time periods, we compare the change in the seasonally-adjusted Case-Shiller Home Price Index and the Consumer Price Index since 1953.

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