Case-Shiller: National House Price Index Unchanged year-over-year in June

"FHFA’s seasonally adjusted monthly index for June was up 0.3 percent from May. "

S&P/Case-Shiller released the monthly Home Price Indices for June ("June" is a 3-month average of April, May and June closing prices). June closing prices include some contracts signed in February, 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 0.65%. This was the fifth consecutive MoM increase following seven straight MoM decreases.

On a seasonally adjusted basis, prices increased in all of the 20 Case-Shiller cities on a month-to-month basis. Seasonally adjusted, San Francisco has fallen 10.3% from the recent peak, Seattle is down 10.2% from the peak, Las Vegas is down 8.3%, and Phoenix is down 8.0%.

FHFA House Price Index

On the FHFA index: U.S. House Prices Rise 3.0 Percent over the Last Year; Up 1.7 Percent from the First Quarter

U.S. house prices rose 3.0 percent between the second quarters of 2022 and 2023, according to the Federal Housing Finance Agency (FHFA) House Price Index (FHFA HPI®). House prices were up 1.7 percent compared to the first quarter of 2023. FHFA’s seasonally adjusted monthly index for June was up 0.3 percent from May.

“U.S. house prices appreciated at a slightly higher rate in the second quarter amid low inventory,” said Dr. Anju Vajja, Principal Associate Director in FHFA’s Division of Research and Statistics. “While prices in a number of western states continued to decline year-over-year, house prices rose in all states quarter-over-quarter.”​
emphasis added

The monthly index increased 0.3% in June. Here is a graph from the FHFA report showing the annual change by region for June 2023 compared to June 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 June 2022 in all of the nine regions.

Case-Shiller House Prices

From S&P S&P CoreLogic Case-Shiller Index Positive Momentum Continues in June

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported 0.0% annual change in June, up from a loss of -0.4% in the previous month. The 10- City Composite showed a decrease of -0.5%, which is an improvement on the -1.1% decrease in the previous month. The 20-City Composite posted a year-over-year loss of -1.2%, up from -1.7% in the previous month.
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Before seasonal adjustment, the U.S. National Index posted a 0.9% month-over-month increase in June, while the 10-City and 20-City Composites also posted like increases of 0.9%.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.7%, while the 10-City and 20-City Composites both posted increases of 0.9%.

“U.S. home prices continued to increase in June 2023,” says Craig J. Lazzara, Managing Director at S&P DJI. “Our National Composite rose by 0.9% in June, and it now stands only -0.02% below its alltime peak from exactly one year ago. Our 10- and 20-City Composites likewise each gained 0.9% in June 2023, and stand -0.5% and -1.2%, respectively, below their June 2022 peaks.

“As we’ve noted previously, the recovery in home prices is broadly based. Prices rose in all 20 cities in June, both before and after seasonal adjustment. Over the last 12 months, 10 cities show positive returns. Otherwise said, half the cities in our sample now sit at all-time high prices.

“Regional differences continue to be striking. On a year-over-year basis, June’s three best-performing cities were Chicago (+4.2%), Cleveland (+4.1%), and New York (+3.4%) – the same three that had topped our May leader board. At the other end of the scale, the worst performers continue to be in the Pacific and Mountain time zones, with San Francisco (-9.7%) and Seattle (-8.8%) at the bottom. The Midwest (+2.8%) continues as the nation’s strongest region, followed this month by the Northeast (+1.6%). The West (-5.9%) remains the weakest region.
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 0.9% in June (SA) and down 0.5% from the recent peak in June 2022. The Composite 20 index is up 0.9% (SA) in June and down 1.2% from the recent peak in June 2022. The National index is up 0.7% (SA) in June and is down slightly from the peak in June 2022.

The Composite 10 SA is down 0.5% year-over-year.  The Composite 20 SA is down 1.2% year-over-year. The National index SA is unchanged 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 June 2023). Note that the months-of-supply is not seasonally adjusted.

The last 14 months are in black showing a possible shift in the relationship, and prices fell for seven months with low levels of inventory! The last few months are following the historic pattern.

In June, the months-of-supply was at 3.1 months, and the Case-Shiller National Index (SA) increased 0.65% 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 July existing home sales report, the NAR reported months-of-supply increased to 3.3 months.

The year-over-year Case-Shiller price changes were slightly above expectations.

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

The June report was mostly for contracts signed in the February through May period and was likely boosted by somewhat lower rates in the first half of 2023.

The recent increase in mortgage rates to over 7% will not impact the Case-Shiller index until reports are 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 up 1.9% year-over-year in July, and, as expected, the Case-Shiller National Index was unchanged year-over-year in the June report - and will likely be up year-over-year in the July report to new all-time highs.

The key question is: Will prices decline further later this year?

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