Case-Shiller home price data via St. Louis Fed, chart by Mish

Home Price Synopsis

• Home prices have peaked this cycle but the decline is certainly tiny compared to the run up.
• Case-Shiller data lags. The latest data is from September and that represents sales primarily made in July and August so the declines shown are undoubtedly understated.
• Prices are falling now across the board. There is a decline in every major metro area.
• Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.

CS National, Top 10 Metro, CPI, OER

Case-Shiller home price data, OER, and CPI data via St. Louis Fed, chart by Mish

Home Price Disconnect Notes

• National is the Case-Shiller national home price index.
• 10-City represents the weighted average of the cities in the first chart.
• CPI is the Consumer Price Index
• OER stands for Owner's Equivalent Rent. It is the single largest component in the CPI with a current weight of 23.65% of the total CPI.
• Rent of Primary Residence is a CPI component with a weight of 7.25% of the CPI.

OER is the price the Bureau of Labor Statistics (BLS) says one would pay to rent one's own house from oneself, unfurnished, without utilities.

Existing Home Sales

Existing home sales from the National Association of Realtors via St. Louis Fed

Existing Home Sales Month-Over-Month

Existing Home Sales Decline 9th Month, Down Another 5.9 Percent

On November 18, I noted Existing home sales from the National Association of Realtors via St. Louis Fed

Existing Home Sales Transaction Crash

• Existing home sales are down 28.4% from one year ago.
• Existing home sales are down 31.7% since January.

That's a transaction crash. And never have we seen such declines other than in recessions. 

Prices have just started to decline. 

Powell Pawns Off the Blame 

Yesterday, Jerome Powell gave a speech at the Brookings Institute.

The Q&A then ended on an interesting housing question and Powell's answer.

"Coming out of the pandemic, rates were very low, people wanted to buy houses, they wanted to get out of the cities and buy houses in the suburbs because of Covid. And so you really had a housing bubble, ... very unsustainable levels and overheating. Now the housing market is going through the other side of that," said Powell.

Rather than admit any part of the blame, Powell tried to lay the blame on regulation. "It's hard to get zoning, hard to get housing built in sufficient quantity to meet the public's demand," said Powell.

Although zoning plays a part, cheap money and QE all the way to March of 22 is the big culprit. 

For more on Powell's speech, please see A Hopium Stock Market Rally on Jerome Powell's Inflation Progress Report.

More By This Author:

Heading Into Recession, There Is A Huge Excess Of Real Private Inventories
Manufacturing Has Peaked This Cycle, 8 Of 11 ISM Components In Contraction
The Fed Is Hiking At The Most Aggressive Pace Ever (And What It Means For Housing)