Economists' Outlook

Housing stats and analysis from NAR's research experts.

February 2016 Case Shiller Housing Price Index

  • Today, Case Shiller released their housing price index data for February 2016. Case Shiller data showed that house prices rose roughly 5 percent in all three indices since February 2015. The national index gained 5.3 percent, while the 10-city composite rose 4.6 percent and the 20-city composite rose 5.4 percent year over year. While the gain in the national index was unchanged in February vs. January, the gain in the 10-city and 20-city indices were lower in February than the previous month.
  • Last week, the Federal Housing Finance Agency (FHFA)and the National Association of Realtors® (NAR) reported price data.
  • NAR data showed that prices grew at a 5.1 percent pace from February 2015 to February 2016, a slower pace than previous months. NAR also reported on new March 2016 data which showed a slight bump up to 5.7 percent growth from one year ago.
  • FHFA data showed that prices were up 5.6 percent in February from one year ago, slightly slower than the pace seen in recent months.
  • Recent housing price data at the national level suggests that home prices continue to increase at a strong pace—faster than what would be considered typical. 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. However, prices in some areas are creating affordability concerns that may dampen demand and slow the pace of increase in the months to come.
  • 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 in the Case Shiller data were seen in Portland (11.9%), Seattle (11.0%), and Denver (9.7%) in the year ending February 2016. By contrast, Washington DC (1.4%), Chicago (1.8%), and New York (2.1%) 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 February prices include information from repeat transactions closed in December, January, and February. 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 an economy where jobs are still being created and there is a low supply of homes for sale. While affordability is a concern in an environment where home price growth is outpacing income growth and mortgage rates are expected to rise, demand has been strong enough in most areas to shake off this concern.

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