S&P and FHFA reports - Continued record highs in y/y price increases in June

 US S&P CoreLogic Case-Shiller 20-City SA (M/M) Jun: 1.77% (est 1.80%; prev 1.81%)

US S&P CoreLogic Case-Shiller 20-City NSA (Y/Y) Jun: 19.08% (est 18.60%; prevR 17.14%; prev 16.99%)

US S&P CoreLogic Case Shiller HPI NSA (Y/Y) Jun: 18.61% (prevR 16.78%; prev 16.61%)






Decided to go ahead and do some more detail on the home price reports.  As noted in the morning update home prices continued their rapid, nearly parabolic, increase on a y/y basis although they did moderate a bit m/m but still posted very strong increases in both reports.  All surveyed cities increased.  

Here was commentary from the US S&P CoreLogic Case-Shiller:

“June 2021 is the third consecutive month in which the growth rate of housing prices set a record, says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The National Composite Index marked its thirteenth consecutive month of accelerating prices with an 18.6% gain from year-ago levels, up from 16.8% in May and 14.8% in April. This acceleration is also reflected in the 10- and 20-City Composites (up 18.5% and 19.1%, respectively). The last several months have been extraordinary not only in the level of price gains, but in the consistency of gains across the country. In June, all 20 cities rose, and all 20 gained more in the 12 months ended in June than they had gained in the 12 months ended in May. Home prices in 19 of our 20 cities (all but Chicago) now stand at all-time highs, as do the National Composite and both the 10- and 20-City indices. 

“June’s 18.6% price gain for the National Composite is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. This month, Boston joined Charlotte, Cleveland, Dallas, Denver, and Seattle in recording their all-time highest 12-month gains. Price gains in all 20 cities were in the top quartile of historical performance; in 19 cities, price gains were in top decile. 

“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. June’s data are consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question. 

“Phoenix’s 29.3% increase led all cities for the 25th consecutive month, with San Diego (+27.1%) and Seattle (+25.0%) close behind. As has been the case for the last several months, prices were strongest in the Southwest (+22.7%) and West (+22.6%), but every region logged top-decile, double-digit gains

US FHFA House Price Index (M/M) Jun: 1.6% (est 1.9%; prevR 1.8%; prev 1.7%)
US House Price Purchase Index (Q/Q) Q2: 4.9% (prevR 3.9%; prev 3.5%)



FHFA found a similar +1.6% increase m/m in June and 18.8% y/y for the second quarter.

Here was the commentary 

"During the second quarter, house prices peaked in June with an 18.8 percent growth rate compared to a year ago,” said Dr. Lynn Fisher, Deputy Director of FHFA’s Division of Research and Statistics. “For the quarter, annual gains surpassed 20 percent in the Mountain, New England, and Pacific census divisions and in all of the top 20 metro areas.” 

Other "Significant Findings" were

  • House prices have risen for 40 consecutive quarters, or since September 2011. 
  • House prices rose in all 50 states and the District of Columbia between the second quarters of 2020 and 2021. The five states with the highest annual appreciation were: 1) Idaho 37.1 percent; 2) Utah 28.3 percent; 3) Arizona23.9 percent; 4) Montana23.7 percent; and 5) Rhode Island23.7 percent. The states showing the lowest annual appreciation were: 1) Alaska8.2 percent; 2) North Dakota 8.7 percent; 3) Louisiana9.6 percent; 4) Mississippi 11.4 percent; and 5) Iowa 11.5 percent. 
  • House prices rose in all of the top 100 largest metropolitan areas over the last four quarters. Annual price increases were greatest in Boise City, ID, where prices increased by 41.1 percent. Prices were weakest in San Francisco-San Mateo-Redwood City, CA, where they increased by 4.5 percent. 
  • Of the nine census divisions, the Mountain division experienced the strongest four-quarter appreciation, posting a 22.9 percent gain between the second quarters of 2020 and 2021 and a 6.8 percent increase in the second quarter of 2021. The Mountain division has led in annual growth for 15 quarters. Annual house price appreciation was weakest in the West North Central division, where prices rose by 14.9 percent between the second quarters of 2020 and 2021

 

To see more content, including summaries of most major U.S. economic reports and my morning and nightly updates go to https://seekingalpha.com/user/15085872/instablogs for more recent or https://sethiassociates.blogspot.com for the full history.


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