S&P/Case-Shiller Home Price Index Continued to Decline in December

This article was originally written by Doug Short. From 2016-2022, it was improved upon and updated by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at Advisor Perspectives/VettaFi.

With this morning's release of the December S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index saw a 0.51% decrease month-over-month (MoM), matching the Investing.com forecast, and a 4.67% increase year-over-year (YoY). After adjusting for inflation, the MoM was reduced to -1.3% and the YoY was reduced to -2.7%.

The seasonally adjusted home prices for the 10-city index saw a -0.4% decrease MoM, and a 4.4% increase YoY. After adjusting for inflation, the MoM dropped to -1.2% and YoY dropped to -2.9%.

The seasonally adjusted home prices for the national index saw a -0.35% decrease MoM, and a 5.8% increase YoY. After adjusting for inflation, the MoM fell to -1.13% and YoY fell to -1.6%.

Here is the analysis from today's Standard & Poor's press release:


“The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index,” says Craig J. Lazzara, Managing Director at S&P DJI. “The National Composite declined by -0.8% in December, and now stands 4.4% below its June peak. For 2022 as a whole, the National Composite rose by 5.8%, the 15th best performance in our 35-year history, although obviously well below 2021’s record-setting 18.9% gain. We could record similar observations in the 10- and 20-City Composites.

“Prices fell in all 20 cities in December, with a median decline of -1.1%. Moreover, for all 20 cities, year-over-year gains in December (median 4.4%) were lower than those of November (median 6.4%). We noted last month that home prices in San Francisco had fallen on a year-over-year basis. San Francisco’s decline worsened in December (-4.2% year-over-year); its west coast neighbors Seattle (-1.8%) and Portland (+1.1%) once again form the bottom of the league table.

“As was the case last month, December’s best performers were all in the Southeast, with Miami (+15.9%) in the lead for the fifth straight month. Tampa (+13.9%) and Atlanta (+10.4%) continued in second and third place, with Charlotte (+9.9%) not far behind. Unsurprisingly, the Southeast (+12.5%) and South (+11.6%) were the strongest regions, and the West (+1.2%) continuing as the weakest.

“The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”