Case Shiller Home Prices: Dispersion Increased As Average Flat
August 25, 2020
Bottom Line: Home prices nationwide were nearly unchanged for the second consecutive month in June. Prices were lower in the more densely populated metro areas of New York, Chicago, and San Francisco as the novel coronavirus sparked a potential secular shift in demand away from housing in urban areas towards less dense, single-family areas. Home prices in Vegas were also sharply lower as that once red-hot region was particularly hard-hit economically. On the plus side, Portland and Phoenix-area home prices were higher on the month. Overall, expect more dispersion and volatility in prices across regions and within regions as the pandemic likely marked a structural shift in demand back towards single-family, suburban housing after a multi-decade trend towards re-urbanization and multi-family housing. On a trend basis, the national averages will likely hover in the area of 2-3% annualized gains. Case Shiller 20-City Home Price Index ROSE by 0.00% (seasonally adjusted) in June to 223.5, compared with market expectations for an increase of 0.1%. Home prices are 3.5% ABOVE their year-ago level. Nationwide home prices are now just 8.1% ABOVE their April 2006 peak, near late 2005 levels, and 63.4% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index ROSE by 0.2% on the month. Housing prices rose in 12 of the 20 metro areas in June (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis. Chicago had the smallest year-over-year increase at 0.9% while Phoenix had the largest year-over-year increase at 9.6%.
Article by Contingent Macro Advisors