CPI and rent prices from the BLS, Case-Shiller home prices via St. Louis Fed, chart by Mish

Although the 10- and 20-city prices are down for the first time since 2012, the national index is still positive.

And home prices rose nationally for the second consecutive month.

Case-Shiller Home Price Index National and Top 10 

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

CPI and OER from the BLS, Case-Shiller home prices via St. Louis Fed, 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.

Case-Shiller Home Prices Percent Change from Peak

Home prices generally peaked in June or July of 2022. 

Chicago is the 10-city exception. Chicago hit a new high in March. 

However, Chicago barely participated in the post-pandemic bubble as shown in the second chart.

Sticky Prices

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

Home Price Synopsis

• Home prices have peaked this cycle, except Chicago, but the decline is certainly tiny compared to the run up.
• There is a two-month lag in reporting. The latest report is for March and that represents sales primarily made in January and February.
• Declines will accelerate but not fast enough to revive a housing market that has soured dramatically.

Mortgage rates temporarily declined towards 6.0 percent early this year. Mortgage rates are currently about 6.95 percent. So, don't expect continued price appreciation. 

Stalemate

• Buyers want lower prices, but sellers want the prices they could have gotten 18 months ago.
• Existing home owners do not want to trade a 3.0 percent mortgage rate for a 6.50 percent mortgage, the current average rate.
• New buyers cannot afford much of a home because prices have not fallen much but mortgage rates have soared.

Existing Home Sales Decline for the 14th Time in 15 Months

Existing Home Sales courtesy of the National Association of Realtors via the St. Louis Fed

On May 18, I reported Existing Home Sales Decline for the 14th Time in 15 Months

Following a mortgage rate dip that led to a buying surge in January, existing home sales declined for the second month. That surge likely explains the small, recent uptick in Case-Shiller home prices.

Existing-Home Transactions

Despite the uptick in price, transactions are at low levels.

Buyers and sellers are trapped but in a much different way than 2008. The result is a crash in transactions, but not a crash in price. 

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