May Case-Shiller Results and June Forecast: Housing Doesn't Blink in Face of Pandemic

• The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 4.5% year-over-year in May (non-seasonally adjusted), down from 4.7% in April.
• Annual growth was down from April in the smaller 20-city index (to 3.7%, from 4%) and in the 10-city index (to 3.1% from 3.4%).
• Phoenix (+9.0%), Seattle (+6.8%), and Tampa (+6.0%) reported the highest year-over-year gains among markets in the 19-city index (Detroit was excluded from the 20-city index this month).

In a remarkable show of resilience, the housing market has stared the pandemic right in the eye and hasn't blinked.

The national Case-Shiller Home Price Index rose 4.5% year-over-year in May. The smaller 10- and 20-city composite indices grew more slowly, at 3.1% and 3.7% year-over-year, respectively. The annual rate of growth was lower in May than in April in the national, 10-city and  20-city indices. On a monthly (seasonally adjusted) basis, the 10- and 20-city indices were unchanged from April; the national index was up 0.1% month-over-month.

	Zillow Forecast, Released 6/30/20	Actual Case-Shiller Indices, Released 7/28/20	Historical Median Absolute Error*
10-City Composite, Month-Over-Month (SA)	0.3%	0%	0.2%
10-City Composite, Year-Over-Year (NSA)	3.3%	3.1%	0.2%
20-City Composite, Month-Over-Month (SA)	0.3%	0%	0.2%
20-City Composite, Year-Over-Year (NSA)	3.9%	3.7%	0.1%
U.S. National Month-Over-Month (SA)	0.4%	0.1%	0.1%
U.S. National Year-Over-Year (NSA)	4.8%	4.5%	0.1%
*Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011.  The national Case-Shiller forecasts began in 2014.

Record-low mortgage rates and a shortage of available homes have fueled competition amongst buyers in the spring and early summer, leading to homes flying off the market at their fastest pace in years and home prices to continue to rise. The savings afforded by record-low mortgage rates allows those who are still in a strong financial position the opportunity to buy a home – and might also allow them to pursue homes that were previously above their price range. Some, of course, are not nearly as fortunate. Data since May suggest that demand and price dynamics have continued, but substantial risks have emerged in recent weeks. A resurgence in coronavirus case counts, and the broader economic uncertainty that accompanies it, poses new risks to the outlook for home prices, and seasonal factors should start to erode buyer demand. It's likely that the housing market will feel the effects of this downturn at some point, but a shortage of inventory and low rates should continue to place upward pressure on prices.

Annual growth in May as reported by Case-Shiller is expected to slow slightly in the 10- and 20-city indices, and accelerate somewhat in the national index. S&P Dow Jones Indices is expected to release data for the June S&P CoreLogic Case-Shiller Indices on Tuesday, August 25.

Index	Actual May Case-Shiller Change	Zillow’s Forecast for the Case-Shiller June Indices
10-City Composite, Month-Over-Month (SA)	0%	0.1%
10-City Composite, Year-Over-Year (NSA)	3.1%	2.8%
20-City Composite, Month-Over-Month (SA)	0%	0.1%
20-City Composite, Year-Over-Year (NSA)	3.7%	3.4%
U.S. National Month-Over-Month (SA)	0.1%	0.2%
U.S. National Year-Over-Year (NSA)	4.5%	4.3%

 

 

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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