Preview: U.S. Housing Prices Growth Will Accelerate in April and May

U.S. housing prices index (20-City Composite) is expected to increase by more than 14% YoY in April. On June 29th, the S&P CoreLogic Case-Shiller Home Price Indexes* 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.

1. Several proxies already pointed to an acceleration of housing prices growth in April

Other indexes already pointed to an acceleration in April. As a matter of fact, the CoreLogic House Price Index jumped by 13.0% YoY (up from 11.3% YoY in March). It was the third consecutive month of double digit gains and the highest rate of annual appreciation since February 2006. In addition, the short-term momentum has been strong with a 2.1% MoM increase from March to April.

Over the same period, the NAR highlighted that “The median existing-home price for all housing types in April was $341,600, up 19.1% from April 2020 ($286,800), as every region recorded price increases. This is a record high and marks 110 straight months of year-over-year gains.” As I already noted, this phenomenom can be partly explained by the collapse in inventory.

2. The momentum is likely to strenghten in May

Latest reports confirmed that housing prices kept climbing at a fast rate in May. As a result, the S&P CoreLogic Case-Shiller (20-City Composite) is likely to rise by more than 15% YoY in May. This week, the NAR highlighted that “The median existing-home price for all housing types in May was $350,300, up 23.6% from May 2020 ($283,500), as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012.“

Other reports confirmed that housing prices growth accelerated in May. Redfin reported “The national median home-sale price hit a record high of $377,200, up a record 26% year over year.” Lastly, “The typical U.S. home grew in value by 13.2% year-over-year in May, and was up 1.7% from April, to $287,148 — both record highs in Zillow data that dates to 1996.” Most importantly, the YoY acceleration is mainly due to record short-term appreciation of the past few months as illustrated by the chart below. In this context, Lawrence Yun, NAR’s chief economist noted that “falling affordability is simply squeezing some first-time buyers out of the market.“

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