Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: S&P CoreLogic Case-Shiller Home Price Indices, March 30, 2021

Home prices continued to power ahead, with the Case-Shiller price index rising 11.2%, the fastest appreciation since 2006. The heated market demand combined with a record-low supply have brought wealth gains for homeowners but affordability challenges for first-time buyers. Total housing wealth gain is now estimated to have risen by $3.4 trillion over the past 12 months to January or over $30,000 on average per homeowner.

This repeat price index is better at capturing the true appreciation compared to rises in the median home price, which can be influenced by active upper-end market sales, as is happening today. The median price nonetheless measures the dollar volume of transactions and has proven to be an early indictor about the direction of the market. For example, the median price started to fall in 2006, which was then followed by subsequent Case-Shiller price declines in 2007. So far in 2021, the median price rose by 15% year-to-date compared to last year, implying no let-up in home prices.

More supply is clearly needed to tame the price growth. Any hindrance to homebuilding therefore will mean a shrinking of the middle class, as homeownership will become increasingly more difficult to achieve.