Case-Shiller Home Prices: Another Downside Miss As Affordability Hinders Buyers

June 26, 2018
Bottom Line: After accelerating modestly higher in the 4th Quarter and early in the 1st Quarter, higher home prices and higher mortgage rates appear to be finally slowing home appreciation with both March and April showing slower gains than expected. The San Francisco area, still one of the strongest on a year-over-year basis, saw a surprise decline in April. Overall, tight supply conditions continue to drive prices, especially in the hottest markets (Seattle and Vegas areas). The slowest gaining markets in the last few years - Chicago, DC, and Cleveland areas, for instance - continue to see the slowest month-on-month gains. Case Shiller 20-City Home Price Index ROSE by 0.2% (seasonally adjusted) in April to 210.7, compared with market expectations for an increase of 0.4%. Home prices are 6.5% ABOVE their year ago level. Nationwide home prices are now just 1.9% ABOVE their April 2006 peak, near late 2005 levels and 54.0% 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 17 of the 20 metro areas in April (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 2.8% while Seattle had the largest year-over-year increase at 14.2%.