| Actual | Previous | Consensus | Consensus Range | |
|---|---|---|---|---|
| 20-City Adjusted - M/M | 0.4% | 0.3% | ||
| 20-City Unadjusted - M/M | -0.3% | 0.0% | ||
| 20-City Unadjusted - Y/Y | 5.2% | 5.9% | 5.2% | 5.0% to 5.9% |
Highlights
S&P Case-Shiller's latest report shows house price inflation continuing to slow in August on an annual basis, in line with expectations. The ongoing downtrend will be pleasing to Federal Reserve officials and market participants looking for progress on sticky shelter price inflation.
The 20-city adjusted index rose 0.4 percent on the month in August, seasonally adjusted, while the unadjusted annual rate of increase eased yet again to 5.2 percent in August from 5.9 percent in July, 6.5 percent in June and 6.9 percent in May. The consensus was 5.2 percent for the year-on-year figure in August.
The unadjusted month on month figure showed a decline of 0.3 percent in August from July.
The 20-city adjusted index rose 0.4 percent on the month in August, seasonally adjusted, while the unadjusted annual rate of increase eased yet again to 5.2 percent in August from 5.9 percent in July, 6.5 percent in June and 6.9 percent in May. The consensus was 5.2 percent for the year-on-year figure in August.
The unadjusted month on month figure showed a decline of 0.3 percent in August from July.
Market Consensus Before Announcement
Housing price increases are expected to slow again to a 5.2 percent increase year-on-year after declining to 5.9 percent in July from 6.5 percent in June.
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.
