Case Shiller Home Prices: Stronger Finish To 2019
February 25, 2020
Bottom Line: After weak gains and even declines in some cases throughout much of the summer months, home prices continued to rebound into late 2019 with the Case- Shiller survey for December coming in stronger than expected. Still, 2019 saw gains of just 2.9% on average nationwide, below the 4% pace of 2018 and 6.2% pace of 2017. Phoenix remained the strongest of the major markets. In contrast, markets in higher-tax states like New York and California continued to rebalance following the 2018 tax law changes limiting federal deductibility of state and local taxes. Overall, the trend is towards modest price gains nationwide on the order of 2 - 3%, just a touch about consumer inflation indices. Case Shiller 20-City Home Price Index ROSE by 0.43% (seasonally adjusted) in December to 220.2, compared with market expectations for an increase of 0.4%. Home prices are 2.8% ABOVE their year-ago level. Nationwide home prices are now just 6.5% ABOVE their April 2006 peak, near late 2005 levels, and 61.0% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index was flat on the month. Housing prices rose in 19 of the 20 metro areas in December (on a seasonally adjusted basis) and 20 of 20 metro areas on a year-over-year basis. Chicago had the smallest year-over-year increase at 0.8%, while Phoenix had the largest year-over-year increase at 6.8%.
Article by Contingent Macro Advisors