Case Shiller Home Prices: More Modest Gains

Bottom Line: After weak gains and even declines in some cases throughout much of the summer months, home prices continued to rebound through November, according to the Case- Shiller survey. Still, the pace of gains is well below that of prior years. The last 12 months have seen increases of about 2.5% on average nationwide, below the 5.5 - 6% annualized gains seen in the previous two years. Phoenix remains the strongest of the major markets. In contrast, markets in higher-tax states like New York and California continue to rebalance following the 2018 tax law changes limiting federal deductibility of state and local taxes. Case Shiller 20-City Home Price Index ROSE by 0.48% (seasonally adjusted) in November to 219.2, compared with market expectations for an increase of 0.4%. Home prices are 2.5% ABOVE their year-ago level. Nationwide home prices are now just 6.1% ABOVE their April 2006 peak, near late 2005 levels and 60.3% ABOVE their January 2012 trough. On a non-seasonally adjusted basis, the home price index ROSE by 0.1% on the month. Housing prices rose in 20 of the 20 metro areas in November (on a seasonally adjusted basis) and in 19 of 20 metro areas on a year-over-year basis. San Francisco had the smallest year-over-year increase at 0.2% while Phoenix had the largest year-over-year increase at 6.5%.