October Case-Shiller Results and November Forecast: Primed for Reacceleration

• The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 3.3% year-over-year in October (non-seasonally adjusted), up from 3.2% in September. Annual growth was also up from September in the smaller 10-city index (to 1.7%, from 1.5%) and in the 20-city index (to 2.2%, from 2.1%).
• Phoenix (+5.8%), Tampa (+4.9%) and Charlotte (+4.8%) reported the highest year-over-year gains among markets in the 20-city index.

2019 was a year of transition in housing, marked by a significant and consistent slowdown in home price appreciation. But as the year draws to a close, signs suggest the market has achieved a soft landing and may even be primed for a reacceleration.

The national Case-Shiller Home Price Index rose 3.3% year-over-year in October. The smaller 10- and 20-city composite indices grew more slowly, at 1.7% and 2.2% year-over-year, respectively. On a monthly (seasonally adjusted) basis, the 10-city index rose by 0.4% in October from September, and the 20-city index was also up 0.4% over the same period.

Index	Zillow Forecast, Released 11/26/19	Actual Case-Shiller Indices, Released 12/31/19	Historical Median Absolute Error*
10-City Composite, Month-Over-Month (SA)	0.2%	0.4%	0.2%
10-City Composite, Year-Over-Year (NSA)	1.5%	1.7%	0.2%
20-City Composite, Month-Over-Month (SA)	0.2%	0.4%	0.2%
20-City Composite, Year-Over-Year (NSA)	2.1%	2.2%	0.1%
U.S. National Month-Over-Month (SA)	0.3%	0.5%	0.1%
U.S. National Year-Over-Year (NSA)	3.2%	3.3%	0.1%
*Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011.  The national Case-Shiller forecasts began in 2014.

Despite recent upticks, mortgage rates remain nearly a full percentage point below where they were this time last year. Teamed with a resilient job market, low mortgage rates have helped boost homebuyer demand, as seen in steadily increasing home sales volume in recent months. In theory, more modest home price growth should also push more sellers to enter the market in order to capitalize on their strong equity gains from the past few years, but thus far that has not been the case. An extreme shortage of for-sale listings, particularly at lower price points, remains a concern and may ultimately result in a sharper reacceleration in home prices than expected.

In the meantime, annual growth in October as reported by Case-Shiller is expected to accelerate in all three major indices. S&P Dow Jones Indices is expected to release data for the November S&P CoreLogic Case-Shiller Indices on Tuesday, Jan. 28.

Index	Actual October Case-Shiller Change	Zillow’s Forecast for the Case-Shiller November Indices
10-City Composite, Month-Over-Month (SA)	0.4%	0.2%
10-City Composite, Year-Over-Year (NSA)	1.7%	2%
20-City Composite, Month-Over-Month (SA)	0.4%	0.3%
20-City Composite, Year-Over-Year (NSA)	2.2%	2.5%
U.S. National Month-Over-Month (SA)	0.5%	0.3%
U.S. National Year-Over-Year (NSA)	3.3%	3.5%

 

Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.

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