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Case-Shiller Home Prices:  Touch Below Expectations, But Trend Still Steady

July 25, 2017

Bottom Line: Prices rose less than expected in May after surprisingly falling in April. For now, the trend remains steady with annual gains in the 5-5.5% range nationwide. So far, more recent data like those from the existing home sales report suggest prices rose as the summer selling season got started. Prices in two previously hot markets, Boston and San Francisco, saw declines for the second month in a row. The strongest markets, though, continued to see strong gains with Portland and Seattle each up about 1% on the month, 10.9% and 13.7%, respectively, in the last 12 months. The weakest markets remain in the Washington DC, Cleveland and Chicago areas.

Case Shiller 20-City Home Price Index ROSE by 0.1% (seasonally adjusted) in May to 198.4, compared with market expectations for an increase of 0.3%. Home prices are 5.7% ABOVE their year ago level. Nationwide home prices are now just 4.0% BELOW their April 2006 peak, near April2005 levels and 45.0% ABOVE their January 2012 trough.

On a non-seasonally adjusted basis, the home price index ROSE by 0.8% on the month.

Housing prices rose in 14 of the 20 metro areas in May (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 3.4% while Seattle had the largest year-over-year increase at 13.9%.

Article by Contingent Macro Advisors