Economists' Outlook

Housing stats and analysis from NAR's research experts.

Latest Case Shiller Housing Price Index

  • Today, Case Shiller released their housing price index data for May 2015 which showed that house prices rose 4.7 percent from May 2014 for the 10-city composite after a 4.6 percent gain in April and 4.9 percent for the 20-city composite after a 4.9 percent gain in April. The national index showed a gain of 4.4 percent year over year after a gain of 4.3 percent the month prior.
  • Last week the National Association of Realtors® (NAR) reported rising prices in May and June. Price growth in the year ended June 2015 was 6.5 percent after an 8.0 percent rise in May 2015. The Federal Housing Finance Agency (FHFA) also showed price gains of 5.7 percent for the year ended May after a gain of 5.5 percent for the year ended in April.
  • Today’s release from Case Shiller provides evidence that home prices in some areas are accelerating. In other areas, prices may not be accelerating, but they continue to grow at a strong pace. Strong buyer demand and low inventories coupled with relatively low levels of new construction are helping prices continue to grow and the keep housing market tipped in favor of sellers.
  • NAR showed that national median prices have reached the previous peak, and FHFA reports that prices are within two percent of their previous peak. The Case Shiller National Index is within eight percent, but the 10-city and 20-city indices are still more than ten percent from peak.
  • 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 (10.0%), San Francisco (9.7%), Dallas (8.4%), and Miami (8.0%) in the year ending May 2015—a repeat of last month’s top markets. By contrast, Washington DC (1.3%), Cleveland (1.6%), and Chicago and Boston (tied at 2.2%) 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 May prices include information from repeat transactions closed in March, April, and May. For this reason, changes in the NAR median price tend to lead Case Shiller and may suggest that price growth could be slowing in the next few months but is likely to remain strong. The current strong pace needs to slow somewhat to keep housing prices in line with job and wage fundamentals.

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