Economists' Outlook

Housing stats and analysis from NAR's research experts.

Case Shiller Price Index (March 2015)

  • Today, Case Shiller released their housing price index data for March 2015 which showed that house prices rose 4.7 percent from March one year ago for the 10-city composite and 5.0 percent for the 20-city composite.  The national index showed a gain of 4.1 percent year over year.
  • Last week NAR reported growing prices in March and April.  Price growth in the year ended April 2015 was 8.9 percent after rising 7.1 percent in March 2015 and 7.2 percent in February 2015.  FHFA January data showed a gain of 5.2 percent for the year ended March after a gain of 5.3 percent for the year ended in February.
  • Today’s release from Case Shiller provides mixed evidence on the acceleration or deceleration of home prices, but it unambiguously shows that home prices are growing at a strong pace.
  • Looking at the seasonally adjusted Case Shiller data, price grew by 0.3 percent from January to February and only 0.1 percent from February to March—a sign of deceleration.  Looking at the unadjusted data, however, Case Shiller shows an increase of 0.1 percent in January to February and 0.8 percent from February to March—a notable and somewhat expected acceleration.
  • In other words, the seasonally adjusted data is showing a slight month to month deceleration while the unadjusted data is showing acceleration.
  • For this reason, let’s look at acceleration or deceleration in the year over year data.  Recent price measures have all showed a roughly steady pace of price increase in February and March, but recent NAR data suggests that this could be only a temporary reprieve as April data showed larger price gains than we saw in March.  City by city in the Case Shiller data, half of the 20 cities saw acceleration in the pace of year over year price growth while half did not in March.
  • Even without further acceleration, the pace of price growth remains too high.  Strong buyer demand and low inventories coupled with relatively low new construction are helping to push prices up, keeping the housing market tipped in favor of sellers.
  • 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 San Francisco (10.3%), Denver (10.0%), Dallas (8.7%), and Miami (9.2%) in the year ending March 2015.  By contrast, Washington DC (1.0%), Cleveland (1.0%), and New York (2.7%) had the slowest year over year growth.  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.
  • NAR reports the median price of all homes that have sold while Case Shiller reports 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 March prices include information from repeat transactions closed in January, February, and March.  For this reason, the changes in the NAR median price tend to lead Case Shiller and may suggest that an additional pick-up in prices will be seen in the next few months.  However, even if additional pick-up is not seen, the current pace is strong and needs to slow to keep housing prices in line with job and wage fundamentals.

Med Sales Price

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