Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Case-Shiller Price Index, June 29, 2021

"The largest ever annual price appreciation is the result of an ongoing housing shortage. The 15% gain in the Case-Shiller price index, which attempts to measure constant, quality price gain, would translate into a wealth gain of $45,000 for a typical homeowner in the U.S. Homeowners in the super-hot Seattle market accumulated $120,000 on average over the past 12 months. The median home price as reported by NAR also experienced the largest price gain ever at 24% in May. But be mindful that the median price is being skewed upward due to an unusual amount of upper-end home sales and does not represent the typical homeowner price appreciation.

Expect continuing solid price gains in the upcoming months. Some calming of the market is only expected to happen in late autumn of this year and into 2022. Home price growth will be in the single digits in 2022. More inventory will show up as homebuilders ramp up production, and from the winding down of the mortgage forbearance program. Also, some investors who could not evict due to the federal law may now decide to unload later this year.

A home price decline is unlikely. However, should it occur, since price gains have been unusually large, it will be of short duration. Many homebuyers would view home price declines as a second-chance opportunity after getting outbid in current multiple-bid market conditions."