Economists' Outlook

Housing stats and analysis from NAR's research experts.

Case Shiller House Prices

•Today, Case Shiller released their housing price index data for October 2015. Case Shiller data showed that house prices rose roughly 5 percent in all three indices since October 2014. The 10-city composite gained 5.1 percent, the 20-city composite rose 5.5 percent, and the national index showed a gain of 5.2 percent year over year. Each index’s October year over year gain was higher than the September year over year gain.

•After growing at a fairly steady pace earlier in 2015, the Case Shiller indices have begun to show acceleration or faster growth in prices in the last 3 to 8 months, depending on the specific index used.

•Last week the Federal Housing Finance Agency (FHFA) and the National Association of Realtors® (NAR) reported price data.

•FHFA data showed that prices were up 6.1 percent in October from one year ago, the same rate of change seen in September but faster than the 5.4 to 5.6 percent year over year growth seen in the earlier part of the year.

•NAR data showed that prices grew at a 5.6 percent pace from October 2014 to October 2015, in between the Case Shiller and FHFA measures. NAR also reported on new November data which showed a bump up to a 6.3 percent growth from one year ago.

•Recent housing price data at the national level suggests that home prices continue to increase at a strong pace and the pace of increase may be accelerating. Strong buyer demand and low inventories coupled with still relatively low levels of new construction are continuing to push prices up and keep housing market tipped in favor of sellers in most local markets.

•Of course, potential buyers and sellers should be sure to put the national numbers in the context of what is going on in their local markets. The fastest overall growth rates were seen in Denver, San Francisco, and Portland in the year ending October 2015 with each market showing 10.9 percent increase over October 2014. By contrast, Washington DC (1.7%), Chicago (1.3%), and Cleveland (2.2%) were the slowest growing markets. Data shows that sellers in these somewhat weaker areas may not have as much power to demand higher prices for their homes given the local market. How does your market compare to the national price trends?

•NAR reports the median price of all homes that have sold while Case Shiller and the Federal Housing Finance Agency report the results of a weighted repeat-sales index. Case Shiller uses public records data which has a reporting lag. To deal with the lag, Case Shiller data is based on a 3 month moving average, so reported October prices include information from repeat transactions closed in August, September, and October. For this reason, changes in the NAR median price tend to lead Case Shiller and may suggest that additional strong price growth could be on the horizon. The current strong pace is a reflection of continued demand from buyers in a steady economy and the still low supply of homes for sale. While affordability is a concern in an environment where home price growth is outpacing income growth, demand has generally been strong enough to shake off this concern.

case shiller

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