Case-Shiller: National House Price Index Increased 0.7% year-over-year in March

"FHFA’s seasonally adjusted monthly index for March was up 0.6 percent from February."

S&P/Case-Shiller released the monthly Home Price Indices for March ("March" is a 3-month average of January, February and March closing prices). January closing prices include some contracts signed in November, so there is a significant lag to this data. Here is a graph of the month-over-month (MoM) change in the Case-Shiller National Index Seasonally Adjusted (SA).

The MoM increase in the seasonally adjusted Case-Shiller National Index was at 0.42%. This was the second MoM increase following seven consecutive MoM decreases.

On a seasonally adjusted basis, prices declined in 5 of 20 Case-Shiller cities on a month-to-month basis. The largest monthly declines seasonally adjusted were in Seattle (-0.9%), Phoenix (-0.4%), and Las Vegas (-0.4%). Seasonally adjusted, Seattle has fallen 12.5% from the peak in May 2022 and San Francisco is down 11.3% from the peak. 19 of 20 cities have seen price declines from the recent peak (SA). Chicago is the exception.

FHFA House Price Index

On the FHFA index: U.S. House Prices Rise 4.3 Percent over the Last Year; Up 0.5 Percent from the Fourth Quarter

U.S. house prices rose 4.3 percent between the first quarters of 2022 and 2023, according to the Federal Housing Finance Agency (FHFA) House Price Index (FHFA HPI®). House prices were up 0.5 percent compared to the fourth quarter of 2022. FHFA’s seasonally adjusted monthly index for March was up 0.6 percent from February.

“U.S. house prices generally increased modestly in the first quarter” said Dr. Anju Vajja, Principal Associate Director in FHFA’s Division of Research and Statistics. “However, year over year prices in many western states have started to decline for the first time in over ten years.”
emphasis added

The monthly index increased 0.6% in March. Here is a graph from the FHFA report showing the annual change by region for March 2023 compared to March 2022. Prices have decreased YoY in the Pacific and Mountain regions but are up YoY everywhere else. Note that the Year-over-year increase is smaller this year, compared to the YoY increase in March 2022 in all of the nine regions.

The next graph from the FHFA report shows the 4-quarter price change. Prices are up 4.3% YoY from Q1 2022.

Case-Shiller House Prices

From S&P: S&P Corelogic Case-Shiller Index Rebound Continued in March

S&P Dow Jones Indices (S&P DJI) today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for March 2023 show a continuing recovery in housing prices, as all 20 major metro markets reported month-over-month price increases. …

Before seasonal adjustment, the U.S. National Index posted a 1.3% month-over-month increase in March, while the 10-City and 20-City Composites posted increases of 1.6% and 1.5%, respectively.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.4%, while the 10-City Composite gained 0.6% and 20-City Composites posted an increase of 0.5%.

“The modest increases in home prices we saw a month ago accelerated in March 2023,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite rose by 1.3% in March, and now stands only 3.6% below its June 2022 peak. Our 10- and 20-City Composites performed similarly, with March gains of 1.6% and 1.5% respectively. On a trailing 12-month basis, the National Composite is only 0.7% above its level in March 2022, with the 10- and 20-City Composites modestly negative on a year-over-year basis."
emphasis added

This graph shows the nominal seasonally adjusted Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000).

The Composite 10 index is up 0.6% in March (SA) and down 3.7% from the recent peak in June 2022. The Composite 20 index is up 0.5% (SA) in March and down 4.2% from the recent peak in June 2022. The National index is up 0.4% (SA) in March and is down 2.3% from the peak in June 2022.

The Composite 10 SA is down 0.8% year-over-year.  The Composite 20 SA is down 1.1% year-over-year. The National index SA is up 0.7% year-over-year.

House Prices and Inventory

This graph below shows existing home months-of-supply, inverted, from the National Association of Realtors® (NAR) vs. the seasonally adjusted month-to-month price change in the Case-Shiller National Index (both since January 1999 through March 2023). Note that the months-of-supply is not seasonally adjusted.

The last eleven months are in black showing a shift in the relationship, and prices fell for seven months with low levels of inventory!

In March, the months-of-supply was at 2.6 months, and the Case-Shiller National Index (SA) increased 0.42% month-over-month.  Historically prices haven’t declined until inventory reached 6 months of supply. See: House Price Battle Royale: Low Inventory vs Affordability

In the April existing home sales report, the NAR reported months-of-supply increased to 2.9 months.

The year-over-year Case-Shiller house price increase was below expectations.

Here are the 30-year mortgage rates according to the Freddie Mac PMMS:

The March report was mostly for contracts signed in the November through February period and was likely boosted by somewhat lower rates in the December through February period.

The recent increase in mortgage rates to over 7% will not impact the Case-Shiller index until reports released in the Fall.

Comparing to Median House Prices

Here is a comparison of year-over-year change in median house prices from the NAR and the year-over-year change in the Case-Shiller index. Median prices are distorted by the mix and repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices. However, in general, the Case-Shiller index follows the median price.

The median price was down 1.7% year-over-year in April, and the Case-Shiller National Index will likely be down year-over-year in the April report.

Note: I’ll have more on real prices, price-to-rent and affordability later this week.