Case Shiller Home Prices: Sharp Increase Nationally

Bottom Line: Home prices nationwide were sharply higher in July after several months of flat prices. Prices were lower in the more densely populated metro areas of New York, and Chicago. It is important to note that these data measure the "metropolitanan statistical area", which in the case of NY and Chicago, is composed of larger geography of dense, urban housing than many other MSAs. Boston, Portland, LA, Seattle, and SF prices were sharply higher as the urban centers of those MSAs are smaller relative to the geographic size of the entire MSA. Overall, expect more dispersion and volatility in prices across regions and within regions as the pandemic likely marked a structural shift in demand back towards single-family, suburban housing after a multi-decade trend towards re-urbanization and multi-family housing. On net at the national level, the demand shift appears to be accelerating the price of gains in housing, likely pushing it modestly above the pre-pandemic trend of 2-3% annualized gains. Case Shiller 20-City Home Price Index ROSE by 0.55% (seasonally adjusted) in July to 224.7, compared with market expectations for an increase of 0.1%. Home prices are 4.0% ABOVE their year-ago level. On a non-seasonally adjusted basis, the home price index ROSE by 0.6% on the month. Housing prices rose in 18 of the 20 metro areas in July (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 0.8% while Phoenix had the largest year-over-year increase at 9.7%.