| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| 20-City Adjusted - M/M | 0.7% | 0.4% to 0.7% | 0.9% | 0.9% |
| 20-City Unadjusted - M/M | 0.6% | 0.9% | ||
| 20-City Unadjusted - Y/Y | -0.6% | -1.0% to 0.3% | 0.1% | -1.2% |
Highlights
Case-Shiller's 20-city resale price index popped into the annual plus column in July, but just barely to an unadjusted 0.1 percent versus four months of low single-digit contraction. The adjusted monthly gain was 0.9 percent with the unadjusted gain at 0.6 percent.
Gains of note include Chicago (4.4 percent annually), Cleveland (4.0 percent) and New York (3.8 percent) in what the report calls the"revenge of the rust belt". Las Vegas (minus 7.2 percent) and Phoenix (minus 6.6 percent) are the worst performers.
Though the report warns that the ongoing jump in mortgage rates or an onset of general economic weakness could"truncate" gains, the"breadth and strength" of July's results support"an optimistic view of future results".
Gains of note include Chicago (4.4 percent annually), Cleveland (4.0 percent) and New York (3.8 percent) in what the report calls the"revenge of the rust belt". Las Vegas (minus 7.2 percent) and Phoenix (minus 6.6 percent) are the worst performers.
Though the report warns that the ongoing jump in mortgage rates or an onset of general economic weakness could"truncate" gains, the"breadth and strength" of July's results support"an optimistic view of future results".
Market Consensus Before Announcement
Forecasters see the adjusted 20-city monthly rate rising 0.7 percent in July versus June's 0.9 percent increase. Year-over-year, the call is down 0.6 percent.
Definition
The S&P Corelogic Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the nation. Composite indexes and regional indexes measure changes in existing home prices and are based on single-family home resales. Condominiums and co-ops are excluded as is new construction. Note that forecasters, in line with recommendations from Standard & Poor's questioning the accuracy of seasonal adjustments, track both seasonally adjusted and not seasonally adjusted monthly data for this indicator.
Description
Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can dampen housing starts. Changes in home values, and the ability to draw upon expanding lines of home equity loans, play key roles in consumer spending and in consumer financial health.
Beginning with the onset of the subprime credit crunch in mid-2007 and with it a downturn in home prices, the ability of borrowers to refinance their debt into affordable fixed rate mortgages was sharply constrained. This in turn limited aggregate consumer spending and contributed to the depth of the Great Recession. From their peak in late 2006 and early 2007 to their nadir in mid-2012, Case-Shiller's home price indexes fell nearly 50 percent. The subsequent recovery proved slow but steady with the indexes finally surpassing their prior highs in early 2018.
Beginning with the onset of the subprime credit crunch in mid-2007 and with it a downturn in home prices, the ability of borrowers to refinance their debt into affordable fixed rate mortgages was sharply constrained. This in turn limited aggregate consumer spending and contributed to the depth of the Great Recession. From their peak in late 2006 and early 2007 to their nadir in mid-2012, Case-Shiller's home price indexes fell nearly 50 percent. The subsequent recovery proved slow but steady with the indexes finally surpassing their prior highs in early 2018.
