Part 2: Current State of the Housing Market; Overview for mid-October
Yesterday, in Part 1: Current State of the Housing Market; Overview for mid-October I reviewed home inventory and sales.
The Case-Shiller National Index was increased 1.0% year-over-year in July and will turn more positive YoY in August (based on other data).
The MoM increase in the seasonally adjusted Case-Shiller National Index was at 0.65%. This was the sixth consecutive MoM increase following seven straight MoM decreases.
Most measures of house prices have shown an increase in prices over the last several months, and a key question I discussed in July is Will house prices decline further later this year? I will revisit this question soon.
Other measures of house prices suggest prices will be up further YoY over the next few months in the Case-Shiller index. The NAR reported median prices were up 3.9% YoY in August, up from 1.7% YoY in July. ICE / Black Knight reported prices were up 3.8% YoY in August, up from 2.4% YoY in July to new all-time highs, and Freddie Mac reported house prices were up 4.0% YoY in August, up from 2.9% YoY in July - and also to new all-time highs.
Here is a comparison of year-over-year change in the FMHPI, median house prices from the NAR, and the Case-Shiller National index.
The FMHPI and the NAR median prices appear to be leading indicators for Case-Shiller. Based on recent monthly data, and the FMHPI, the YoY change in the Case-Shiller index will increase further in the report for August.
In real terms, the Case-Shiller National index is down 3.4% from the peak, seasonally adjusted. Historically it takes a number of years for real prices to return to the previous peak, see House Prices: 7 Years in Purgatory.
30-Year Mortgage Rates are Solidly Above 7%
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