Case Shiller 20-City Home Price Index ROSE by 0.8% (seasonally adjusted) in December to 166.7, compared with market expectations for an increase of 0.6%. This was the index's 23rd consecutive monthly increase. Home prices are 13.5% ABOVE their year ago level. This was the 19th consecutive year-over-year increase following 20 straight months of year-over-year declines. Nevertheless, nationwide home prices are still 19.4% BELOW their April 2006 peak, near August 2004 levels and 21.9% ABOVE their January 2012 trough.
(On a non-seasonally adjusted basis, the home price index FELL by 0.1% but is still 13.4% ABOVE their year earlier level.) Housing prices rose in 17 of the 20 metropolitan areas in December (on a seasonally adjusted basis) and in 20 of 20 metropolitan areas on a year-over-year basis. Cleveland had the smallest year-over-year increase at 5.3% while Las Vegas had the largest year-over-year increase at 28.2%.
Bottom Line: Home prices rose moderately in December for the 23rd consecutive month. Prices are now 21.9% above the cyclical nadir in January 2012 and are improving in every metropolitan area. Rising home prices may begin to alleviate a lack of housing inventory (months supply has been about 82% of normal levels) by encouraging more homeowners to put their properties on the market. Home prices are still steadily improving and there was only a slight slowdown (20 basis points) in the pace of price gains year-over-year due to higher borrowing costs. This report reflects December housing activity and thus was not likely impacted by weather.