S&P CoreLogic Case-Shiller 20 City Home Price Index September 2018 Continues To Slow

The non-seasonally adjusted S and P CoreLogic Case-Shiller home price index (20 cities) year-over-year rate of home price growth decelerated from 5.5 % to 5.1 %. The index authors stated “nine cities saw prices decline in September compared to August”.

Analyst Opinion of Case-Shiller HPI

I continue to see this a situation of supply and demand. It is the affordability of the homes which is becoming an issue for the lower segments of consumers. With the rise in mortgage rates, it is pricing more and more consumers out of the market. If mortgage rates continue to rise – we likely will see some retrenchment in home prices.

  • 20 city unadjusted home price rate of growth decelerated 0.4 % month-over-month. [Econintersect uses the change in year-over-year growth from month-to-month to calculate the change in rate of growth]
  • Note that Case-Shiller index is an average of the last three months of data.
  • The market expected from Econoday:
  •   Consensus Range Consensus Actual 20-city, SA – M/M 0.2 % to 0.4 % 0.3 % +0.3 % 20-city, NSA – M/M     +0.0 % 20-city, NSA – Yr/Yr 5.1 % to 5.6 % 5.3 % +5.2 %

    S&P/Case-Shiller Home Price Indices Year-over-Year Change

    Comparing the NAR and Case-Shiller home price indices, it needs to be understood each of the indices uses a unique methodology in compiling their index – and no index is perfect.

    The way to understand the dynamics of home prices is to watch the direction of the rate of change. Here home price growth generally appears to stabilize (rate of growth not rising or falling).

    There are some differences between the indices on the rate of “recovery” of home prices.

    A synopsis of Authors of the Leading Indices:

    Case Shiller’s David M. Blitzer, Chairman of the Index Committee at S&P Indices:

    Home prices plus data on house sales and construction confirm the slowdown in housing. The S&P CoreLogic Case-Shiller National Index showed a 5.5% year-over-year gain, weaker for the second month in a row as 16 of 20 cities showed smaller annual price gains. On a monthly basis, nine cities saw prices decline in September compared to August. In Seattle, where prices were rising at doubledigit annual rates a few months ago, prices dropped last month. The few places reporting larger gains including some of the cities which had the biggest gains and largest losses 10 years ago: Las Vegas, Phoenix and Tampa.

    Sales of both new and existing single family homes peaked one year ago in November 2017. Sales of existing homes are down 9.3% from that peak. Housing starts are down 8.7% from November of last year. The National Association of Home Builders sentiment index dropped seven points to 60, its lowest level in two years. One factor contributing to the weaker housing market is the recent increase in mortgage rates. Currently the national average for a 30-year fixed rate loan is 4.9%, a full percentage point higher than a year ago.


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