Home Prices Rose 5.3% Year-over-Year, Gains Continue in November

With today's release of the November S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.9% month over month. The seasonally adjusted year-over-year change has hovered between 4.4% and 5.4% for the last twenty-four months. Today's S&P/Case-Shiller National Home Price Index (not seasonally adjusted) reached another new high.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.9% from the previous month. The nonseasonally adjusted index was up 5.3% year-over-year.

Investing.com had forecast a 0.7% MoM seasonally adjusted increase and 5.1% YoY nonseasonally adjusted for the 20-city series.

Here is an excerpt of the analysis from today's Standard & Poor's press release.

“With the S&P CoreLogic Case-Shiller National Home Price Index rising at about 5.5% annual rate over the last two-and-a-half years and having reached a new all-time high recently, one can argue that housing has recovered from the boom-bust cycle that began a dozen years ago,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “The recovery has been supported by a few economic factors: low interest rates, falling unemployment, and consistent gains in per-capita disposable personal income. Thirty-year fixed rate mortgages dropped under 4.5% in 2011 and have only recently shown hints of rising above that level. The unemployment rate at 4.7% is close to the Fed’s full employment target. Inflation adjusted per capita personal disposable income has risen at about a 2.5% annual rate for 30 months. [Link to source]

The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.

Home Price Index