S&P/Case-Shiller Home Price Indices

On February 23, 2016, S&P Dow Jones Indices released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released for December 2015 shows that home prices continued their rise across the country over the last 12 months.

The S&P/Case-Shiller U.S. National Home Price Index, covering all nine U.S. census divisions, recorded a slightly higher year-over-year gain with a 5.4% annual increase in December 2015 versus a 5.2% increase in November 2015. The 10-City Composite increased 5.1% in the year to December compared to 5.2% previously. The 20-City Composite’s year-over-year gain was 5.7% versus the same as November.

Portland, San Francisco and Denver continue to report the highest year over year gains among the 20 cities with another month of double digit annual price increases. Portland led the way with an 11.4% year-over-year price increase, followed by San Francisco with 10.3% and Denver with a 10.2% increase. Miami ranked number 6th with a 7.1% increase. Thirteen cities reported greater prices increases in the year ending December 2015 versus the year ending November 2015.

“While home prices continue to rise, the pace is slowing a bit,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Seasonally adjusted, Miami had lower prices this month than last and 10 other cities saw smaller increases than last month. Year-over-year, seven cities saw the rate of price increases wane. Even with some moderation, home prices in all but one city are rising faster than the 2.2% year-over-year increase in the CPI core rate of inflation.

“Sparked by the stock market’s turmoil since the beginning of the year, some are concerned that the current economic expansion is aging quite rapidly. The recovery is six years old, but recoveries do not typically die of old age. Housing construction, like much of the economy, got off to a slow start in 2009-2010 and is only now beginning to show some serious strength. Continued increases in pricing of existing homes, as shown in the S&P/Case – Shiller Home Price Indices, should encourage further activity in new construction. Total housing starts have stayed above an annual rate of one million starts per year since last March and single family homes have been higher than 700,000 units at annual rates since June. Housing investment continues its positive contribution to GDP growth.”

The table below provides selected data for the S&P/Case-Shiller Miami Home Price Index compared to the S&P/Case Shiller 20-City Composite Home Price Index:

EffectiveIndexReturns
IndexDateLevels1 Mo.3 Mo.12 Mo.
Miami IndexDec 2015206.05-0.31%1.11%7.11%
20 City IndexDec 2015182.750.02%0.09%5.74%