S&P/Case-Shiller Home Price Index: Annual Gains Fall

With today's release of the December S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.19% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.7% for the last two-plus years. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high.

(Click on image to enlarge)

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 0.19% from the previous month. The nonseasonally adjusted index was up 4.2% year-over-year.

Investing.com had forecast a 0.3% MoM seasonally adjusted increase and 4.9% YoY nonseasonally adjusted for the 20-city series.

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

“The annual rate of price increases continues to fall,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Even at the reduced pace of 4.7% per year, home prices continue to outpace wage gains of 3.5% to 4% and inflation of about 2%. A decline in interest rates in the fourth quarter was not enough to offset the impact of rising prices on home sales.The monthly number of existing single family homes sold dropped throughout 2018, reaching an annual rate of 4.45 million in December. The 2018 full year sales pace was 4.74 million.

“Regional patterns continue to shift. Seattle and Portland, OR experienced the fastest price increases of any city from late 2016 to the spring of 2018; in December, they ranked 11th and 16th. Currently, the cities with the fastest price increases are Las Vegas and Phoenix. These are a reminder of how prices rose and collapsed in the financial crisis 12 years ago. Despite their recent gains, Las Vegas and Phoenix are the furthest below their 2006 peaks of any city followed in the S&P CoreLogic Case-Shiller Indices. [Link to source]

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