HPI Composite: - 20 City (S.A.) +0.9% M/M vs. +1.0% consensus, +1.0% prior; US FHFA House Price Index (M/M) Oct: 1.1% (prev 0.9%) - Home prices remain hot but under peak levels
Home prices continued to remain elevated y/y although softening some from record highs. They also continue to show signs of decelerating m/m although there was a bit of discrepancy which we didn't have last month when m/m gains fell for both surveys. This month, HPI fell but the FHFA jumped up two tenths. It remains though below the highs of the summer. I think this remains consistent with us being past peak home price growth.
US S&P CoreLogic Case-Shiller
HPI Composite: - 20 City (S.A.) +0.9% M/M vs. +1.0% consensus, +1.0% prior.
HPI Composite: - 20 City (N.S.A.) +0.8% M/M vs. +1.0% consensus, +0.8% prior.
HPI Composite (N.S.A.) - 20-City +18.4% Y/Y vs. +18.6% consensus, +19.1% prior.
S&P CoreLogic Case-Shiller House Price Index (HPI) survey (I know it's a mouthful) for October (so a little dated, and remember it's a 3-month average, so it includes an average of the three months ending in Oct) showed home prices up 19.1% y/y (down from 19.7% in September) for the full national average (all cities), and +1.03% m/m seasonally adjusted, down from 1.18% in September and the lowest m/m gain in 14 months. For the frequently cited 20-city index it came in at 18.4% y/y (down from 19.1% in September and below estimates for 18.6%) and 0.9% m/m (down from 1.0% in September). Again this month, all surveyed cities in the 20-city index increased (with seasonal adjustments) and were at all time highs, although the majority of them decelerated m/m.
Here was commentary from the HPI on the 20-city index:
“In October 2021, U.S. home prices moved substantially higher, but at a decelerating rate,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite Index rose 19.1% from year-ago levels, and the 10- and 20-City Composites gained 17.1% and 18.4%, respectively. In all three cases, October’s gains were below September’s, and September’s gains were below August’s. That said, October’s 19.1% gain in the National Composite is the fourth-highest reading in the 34 years covered by our data. (The top three were the three months immediately preceding October.)
“We continue to see very strong growth at the city level. All 20 cities saw price increases in the year ended October 2021. October’s increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them. As was the case last month, however, in 14 of 20 cities, prices decelerated – i.e., increased by less in October than they had done in September.
“Phoenix’s 32.3% increase led all cities for the 29th consecutive month. Tampa (+28.1%) and Miami (+25.7%) continued in second and third place in October, narrowly edging out Las Vegas, Dallas, and San Diego. Prices were strongest in the South and Southeast (both +24.4%), but every region continued to log double-digit gains.
“We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge represents an acceleration of purchases that would have occurred over the next several years, or reflects a more permanent secular change.”
US FHFA
FHFA came in a bit hotter than the HPI (and up from September) with an increase of 1.1% m/m, up from 0.9% in September and 1.0% in August, but down from +1.4% in July and 1.6% in June. Y/y prices were up 17.4% (so a little below the HPI).
From the report:
House prices rose nationwide in October, up 1.1 percent from the previous month, according to the latest Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices rose 17.4 percent from October 2020 to October 2021. The previously reported 0.9 percent price change for September 2021 remained unchanged.For the nine census divisions, seasonally adjusted monthly house price changes from September 2021 to October 2021 ranged from -0.3 percent in the New England division to +1.7 percent in the East South Central division. The 12-month changes ranged from +13.2 percent in the West North Central division to +23.2 percent in the Mountain division.
“House price levels continue to rise but the rapid pace is curtailing through October," said Will Doerner, Ph.D., Supervisory Economist in FHFA's Division of Research and Statistics. “The large market appreciations seen this spring peaked in July and have been cooling this fall with annual trends slowing over the last four consecutive months."
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