Case-Shiller: National House Price Index Decreased 0.2% year-over-year in April

"U.S. house prices rose in April, up 0.7 percent from March, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI®)."

S&P/Case-Shiller released the monthly Home Price Indices for April ("April" is a 3-month average of February, March and April closing prices). April closing prices include some contracts signed in December, 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 0.53%. This was the third consecutive MoM increase following seven straight MoM decreases.

On a seasonally adjusted basis, prices declined in only 1 of the 20 Case-Shiller cities on a month-to-month basis. The only monthly decline seasonally adjusted was in Phoenix (-0.1%). Seasonally adjusted, Seattle has fallen 12.9% from the peak in May 2022 and San Francisco is down 12.1% from the peak. 15 of 20 cities have seen price declines from the recent peak (SA).

FHFA House Price Index

On the FHFA index: FHFA House Price Index Up 0.7 Percent in April; Up 3.1 Percent from Last Year

U.S. house prices rose in April, up 0.7 percent from March, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI®). House prices rose 3.1 percent from April 2022 to April 2023. The previously reported 0.6 percent increase in March was revised downward to 0.5 percent.

“U.S. house prices generally increased moderately in April,” said Dr. Nataliya Polkovnichenko, Supervisory Economist in FHFA’s Division of Research and Statistics. “However, on a year-over-year basis, house prices in some regions of the country continued to decline.”
emphasis added

The monthly index increased 0.7% in April. Here is a graph from the FHFA report showing the annual change by region for April 2023 compared to April 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 April 2022 in all of the nine regions.

Case-Shiller House Prices

From S&P S&P CoreLogic Case-Shiller Index Continued Gains in April

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a -0.2% annual decrease in April, down from a gain of 0.7% in the previous month. The 10-City Composite showed a decrease of -1.2%, down from the -0.7% decrease in the previous month. The 20-City Composite posted a -1.7% year-over-year loss, down from -1.1% in the previous month.
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Before seasonal adjustment, the U.S. National Index posted a 1.3% month-over-month increase in April, while the 10-City and 20-City Composites both posted increases of 1.7%.

After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 0.5%, while the 10-City Composite gained 1.0% and 20-City Composites posted an increase of 0.9%.

“The U.S. housing market continued to strengthen in April 2023, says Craig J. Lazzara, Managing Director at S&P DJI. “Home prices peaked in June 2022, declined until January 2023, and then began to recover. The National Composite rose by 1.3% in April (repeating March’s performance), and now stands only 2.4% below its June 2022 peak. Our 10- and 20-City Composites both gained 1.7% in April.

“The ongoing recovery in home prices is broadly based. Before seasonal adjustments, prices rose in all 20 cities in April (as they had also done in March). Seasonally adjusted data showed rising prices in 19 cities in April (versus 14 in March).
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 0.5% in April (SA) and down 2.7% from the recent peak in June 2022. The Composite 20 index is up 1.0% (SA) in April and down 3.3% from the recent peak in June 2022. The National index is up 0.9% (SA) in April and is down 1.8% from the peak in June 2022.

The Composite 10 SA is down 1.2% year-over-year.  The Composite 20 SA is down 1.7% year-over-year. The National index SA is down 0.2% 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 April 2023). Note that the months-of-supply is not seasonally adjusted.

The last 12 months are in black showing a shift in the relationship, and prices fell for seven months with low levels of inventory!

In April, the months-of-supply was at 2.9 months, and the Case-Shiller National Index (SA) increased 0.53% 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 May existing home sales report, the NAR reported months-of-supply increased to 3.0 months.

The year-over-year Case-Shiller price changes were below expectations.

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

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

The recent increase in mortgage rates to near 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 down 3.1% year-over-year in May, and, as expected, the Case-Shiller National Index was down year-over-year in the April report.

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

Seasonally adjusted house prices have increased over the last three months, and the big question is “Will house prices decline further later this year?”