- Prior was +2.5% y/y
- 20-city house price index +0.3% m/m vs +0.3% expected
Mortgage rates at 7.5% aren’t doing any favors for the housing market.
For background, the S&P Case-Shiller Home Price Indices are the best-known measure of US house prices. They’re published on the last Tuesday of each month at 9 am ET and carry a roughly two-month lag, so a release in late October covers August.
The indexes use a repeat-sales method, tracking price changes on the same single-family homes as they sell over time. Because they compare a property with itself, they avoid the distortions that come from changes in the mix of homes being sold, a weakness of simple median price measures. Each monthly reading is a three-month moving average, which smooths the data but adds to the lag.
The headline figure is usually the year-over-year change in the 20-city composite index. S&P also publishes a 10-city composite and a national index, along with results for each of the 20 metro areas, which often show sharp regional divergence. Markets focus on the unadjusted annual changes, though seasonally adjusted monthly figures are available.
The Federal Housing Finance Agency releases its own house price index at the same time. It covers homes financed with conforming mortgages backed by Fannie Mae and Freddie Mac and tends to tell a similar story.
The long lag means Case-Shiller rarely moves markets, and by the time it’s released, mortgage rates and housing activity may already have shifted. Its value is in tracking the broad trend in home values, which matters for household wealth, consumer spending and the health of the housing sector. Home prices don’t feed directly into CPI, where shelter costs are measured through rents, but sustained price gains can affect rents and affordability over time.
This article was written by Adam Button at investinglive.com.