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US: Case-Shiller Home Price Index
| Consensus | Consensus Range | Actual | Previous | |
| 20-City Adjusted - M/M | -0.1% | -0.2% to 0.1% | 0.0% | -0.2% |
| 20-City Unadjusted - M/M | 1.0% | 1.0% | ||
| 20-City Unadjusted - Y/Y | 0.9% | 0.8% to 1.6% | 1.1% | 0.8% |
Highlights
The housing price index comes in marginally hotter than expected with a 1.1 percent increase year on year for the 20-city index in April. That is up from 0.8 percent in March and 0.9 percent in February. Still, these numbers suggest muted housing price increases and tend to confirm that housing prices are not contributing to the inflation problem evident elsewhere in the economy.
On a monthly basis, prices are flat, seasonally adjusted, and up 1.0 percent, not seasonally adjusted, in April from March. Expectations for the seasonally adjusted monthly change looked for a decline 0f 0.1 percent.
Relatively high mortgage rates continue to strain affordability, which is keeping a lid on housing prices.
Market Consensus Before Announcement
Case-Shiller seen down 0.1 percent on the month, seasonally adjusted, and up 0.9 percent on year for April. That is not far off the March performance when prices declined 0.2 percent on the month and rose 1.0 percent on year.
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.