Case-Shiller Home Prices: Stronger Than Expected

Bottom Line: Home prices rose in October, slightly more than expected after slow gains most of the summer months. After running at a pace of 4-5% annually for several years, home price gains slowed throughout much of 2018 but have re-accelerated modestly in the last few months. The three months ended in October saw gains of 3.8% annualized, modestly faster than the six month pace of 3.0%. Finally, we continued to see hints of convergence nationally with the slowest cities (like Chicago, New York and DC) still accelerating and the fastest growth cities (San Francisco and Seattle) seeing modest declines. Vegas, though, remains an extremely strong outlier, up over 14% year-on-year. Case Shiller 20-City Home Price Index ROSE by 0.4% (seasonally adjusted) in October to 213.6, compared with market expectations for an increase of 0.3%. Home prices are 5.1% ABOVE their year ago level. Nationwide home prices are still just 3.3% ABOVE their April 2006 peak, near late 2005 levels and 56.1% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index FELL by 0.0% on the month. Housing prices rose in 17 of the 20 metro areas in October (on a seasonally adjusted basis) and in 20 of 20 metro areas on a year-over-year basis.

• Washington DC had the smallest year-over-year increase at 3.3% while Las Vegas had the largest year-over-year increase at 14.4%.