Preview: U.S. Housing Prices Index Will Increase By More Than 8% YoY




 

U.S. housing prices index is expected to increase by more than 8.0% in November. On January 26th, the S&P CoreLogic Case-Shiller Home Price Indexes* for November will be released. As a reminder, they are calculated monthly using a three-month moving average and are published with a two-month lag at 9 am EST on the last Tuesday of every month.

 

In October, the main index (20-City Composite) beat the consensus (+6.95%e YoY), rising by 7.95% YoY, up from 6.64% in September. It was the fastest increase YoY since June 2014. Figures showed all cities posted YoY home-price gains, led by Phoenix, Seattle and San Diego. Note that data for Detroit was excluded because of pandemic-related reporting delays.

 

U.S. housing prices
 

On a MoM basis, home prices rose 1.6%, also more than projected, and the most since April 2013. In the meantime, nationwide, home prices jumped by 8.41% YoY in October on the S&P Case Shiller Index. That was up from a 6.99% YoY gain in September. October marked the highest annual rate of price growth since March 2014.

 

According to my proxies, the trend will strenghten and the U.S. housing prices index (20-City Composite) should easily exceed the +8% YoY threshold in November:

→ Buyers kept on benefiting from favorable market conditions with mortgage rates recently hitting the lowest level on record
→>Demand for second homes skyrocketed amid pandemic (+100% YoY in October according to Redfin)
→ Housing supply remained limited, reaching the lowest in data back to 1982.

 

In addition, other indexes already pointed to an acceleration in November. As a matter of fact, the CoreLogic House Price Index for November jumped by 8.17% YoY (up from 7.25% YoY in October). It was the fastest increase since March 2014.

 


 

*More than 27 years of history are available for these data series, and are available here.

 

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