Case-Shiller: Home Prices (Positively) Wilt

Appreciation continued to shrink this spring—but the narrative overall is positive, with double-digit gains now settling into smaller, sustainable upticks.

In alignment with a consistent trend, annual appreciation in March weakened to 3.7 percent, according to the latest national S&P CoreLogic/Case-Shiller Indices. In February, annual growth was 3.9 percent.

According to Ralph McLaughlin, CoreLogic’s deputy chief economist and executive of Research and Insights, all of the largest markets are slowing.

“The U.S. housing market moderation has now lasted a year, driven by considerable slowing in the nation’s most expensive markets,” McLaughlin says. “While the slowdown is most pronounced in these areas, all of the 20-city markets are slowing, suggesting the cooldown has broken from its confines in the West.”

The days of double-digit gains are gone, according to David M. Blitzer, chairman and managing director of the S&P Dow Jones Index Committee.

“The patterns seen in the last year or more continue: Year-over-year price gains in most cities are consistently shrinking,” Blitzer explains. “Double-digit annual gains have vanished. The largest annual gain was 8.2 percent in Las Vegas; one year ago, Seattle had a 13 percent gain. In this report, Seattle prices are up only 1.6 percent.

“The shift to smaller price increases is broad-based and not limited to one or two cities where large price increases collapsed,” Blitzer says. “Other housing statistics tell a similar story. Existing single-family home sales are flat. Since 2017, peak sales were in Feb. 2018 at 5.1 million at annual rates; the weakest were 4.36 million in Jan. 2019. The range was 650,000.”

Despite the slowing, appreciation and inflation are mismatched, affecting home sales.

“The difficulty facing housing may be too-high price increases,” says Blitzer. “At the currently lower pace of home price increases, prices are rising almost twice as fast as inflation. In the last 12 months, the S&P Corelogic Case-Shiller National Index is up 3.7 percent, double the 1.9 percent inflation rate. Measured in real, inflation-adjusted terms, home prices today are rising at a 1.8 percent annual rate. This compares to a 1.2 percent real annual price increases in housing since 1975.”

The complete data for the 20 markets measured by S&P:

Atlanta, Ga.
MoM: 0.7%
YoY: 4.7%

Boston, Mass.
MoM: 1.6%
YoY: 3.8%

Charlotte, N.C.
MoM: 0.8%
YoY: 4%

Chicago, Ill.
MoM: 0.6%
YoY: 1.8%

Cleveland, Ohio
MoM: 0.9%
YoY: 3.5%

Dallas, Texas
MoM: 0.3%
YoY: 3%

Denver, Colo.
MoM: 1%
YoY: 4.3%

Detroit, Mich.
MoM: 0.4%
YoY: 3.3%

Las Vegas, Nev.
MoM: 0.1%
YoY: 8.2%

Los Angeles, Calif.
MoM: 0.5%
YoY: 1.3%

Miami, Fla.
MoM: 0.6%
YoY: 4.3%