With today's release of the September S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.4% month over month. The seasonally adjusted year-over-year change has hovered between 4.4% and 5.4% for the last twelve months. Today's S&P/Case-Shiller National Home Price Index (not seasonally adjusted) reached a new high.
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 0.2% from the previous month. The nonseasonally adjusted index was up 5.1% year-over-year.
Investing.com had forecast a 0.4% MoM seasonally adjusted increase and 5.2% YoY nonseasonally adjusted for the 20-city series.
Here is an excerpt of the analysis from today's Standard & Poor's press release.
“The new peak set by the S&P Case-Shiller CoreLogic National Index will be seen as marking a shift from the housing recovery to the hoped-for start of a new advance” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “While seven of the 20 cities previously reached new post-recession peaks, those that experienced the biggest booms—Miami, Tampa, Phoenix and Las Vegas—remain well below their all-time highs. Other housing indicators are also giving positive signals: sales of existing and new homes are rising and housin g starts at an annual rate of 1.3 million units are at a post-recession peak." [Link to source]
The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.
For an understanding of the home price data over longer time frames, we think a real, inflation-adjusted visualization of the data is an absolute necessity. Here is the same chart as the one above adjusted for inflation using a subcomponent of Bureau of Labor Statistics' Consumer Price Index, the owners' equivalent rent of residences, as the deflator. Among other things, the real version gives a better sense of the dynamics of the real estate bubble that preceded the last recession.
The next chart shows the year-over-year Case-Shiller series, again using the seasonally adjusted data.
Here is the same year-over-year overlay adjusted for inflation with the Consumer Price Index owners' equivalent rent of residences.
For a long-term perspective on home prices, here is a look at the seasonally and inflation-adjusted Case-Shiller price index from 1953, the first year that monthly data is available. Because the CPI owners' equivalent rent of residences didn't start until 1983, we've used the broader seasonally adjusted Consumer Price Index.
For additional perspectives on residential real estate, here is the complete list of our monthly updates:
