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 November and that represents sales primarily made in August, September, and October so the declines shown are undoubtedly understated by a lot, depending on the market.
• Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.

CS National ,Top 10 Metro, CPI, OER Index Levels

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

Chart Notes

• OER stands for Owner's Equivalent Rent. It it the price one would pay to rent a home, unfurnished and without utilities.
• Home prices wildly disconnected from the CPI in 2000 and in 2013. The disconnect accelerated in 2020.

The Fed ignored all three occasions hoping to make up for "lack of inflation". The Fed "succeeded" in producing inflation beyond it's wildest dreams. 

Rent, OER, Case-Shiller Percent Change From Year Ago

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

The year-over-year CPI has finally peaked this cycle as have home prices. But both are falling slowly. Inflation has been sticky.

Case-Shiller Home Prices Percent Change Year-Over-Year

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

I am certain that home prices are not up a national average of 5.76 percent from a year ago. 

The chart is the very lagging. Prices in many places are down much more. Yet, the chart is more accurate than many portray. 

For example, in its latest report the National Association of Realtors reported "the median existing-home sales price increased 1.3% from one year ago to $359,000". 

Median prices are not an accurate measure but they are more timely. Both measures are flawed, but in different ways.

Prices have been sticky because existing home owners have low mortgage rates and do not want to move. Supply is limited. 

Don't dwell too much on the percentages because the data is stale.

But do look at the trends. Those trends will be in place for a while. 

Also compare high tax Chicago and New York with low tax Miami.Prices reflect an escape from tax hell. Cities in California are joining that club.

Existing Home Sales Decline 12th Month 

No Rebound in Existing Home Sales Despite a Drop in Mortgage Rates

A brief drop in mortgage rates towards 6.0 percent was not enough to entice buyers in January. Buyers and sellers are on strike. 

For discussion, please see No Rebound in Existing Home Sales Despite a Drop in Mortgage Rates

Buyers want lower prices, but sellers want the prices they could have gotten 18 months ago. 

And the existing home owners do not want to trade a 3.0 percent mortgage rate for a 6.8 percent mortgage. 

People are trapped in their homes, but in a much different way than 2008.

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