E Economics

Preview (S&P CoreLogic Case-Shiller) | U.S. Housing Prices Index For October Will Increase By More Than 7.0% YoY

01 December, 2020




 

On December 29th, the S&P CoreLogic Case-Shiller Home Price Indexes for October 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.

 

As I expected, the main index (20-City Composite) beat the consensus last month (+5.30%e YoY), rising by 6.57% YoY in September, up from 5.33% in August. It was the fastest increase YoY since April 2018.

 

According to my proxies, the trend will strenghten and the index should easily exceed the +7% YoY threshold in October amid strong fundamentals (for more details, see my previous note):

→ Buyers kept on benefiting from favorable market conditions with mortgage rates reaching the lowest level on record
→ Demand for second homes skyrocketed amid pandemic
→ Housing supply remained limited

 

In addition, other indexes already pointed to an acceleration in October. As a matter of fact, the CoreLogic House Price Index for October jumped by 7.34% YoY (up from 6.49% YoY in September). It was the fastest increase since April 2014.