The August S&P/Case-Shiller (SPCS) data out this morning showed more slowing in the housing market with the annual change in the 20-city index falling 1.1 percentage points to 5.6 percent. The national index was up 5.1 percent on an annual basis in August. Our current forecast for SPCS next month indicates further slowing with the annual increase in the 20-City Composite Home Price Index falling to 4.7 percent in September. The last time the SPCS 20-City index grew less than 5 percent annually was in October 2012, when the index grew 4.3 percent year-over-year.

The non-seasonally adjusted (NSA) monthly increase in August for the 20-City index was 0.2 percent, and we expect it to fall 0.2 percent in September. We expect a monthly decline for the 10-City Composite Index, which is projected to drop 0.3 percent from August to September.

All forecasts are shown in the table below. These forecasts are based on the August SPCS data release this morning and the September 2014 Zillow Home Value Index (ZHVI), released October 22. Officially, the SPCS Composite Home Price Indices for September will not be released until Tuesday, November 25.

This month’s (August) SPCS release continued the slowdown in month-over-month appreciation seen since early 2014. August 10-City and 20-City Composites (SA) were down 0.2 percent and 0.1 percent from July, respectively. Twelve of the 20-City Composite markets had negative seasonally adjusted month-over-month changes in home prices. On the other hand, markets like Las Vegas and Miami continued to appreciate on both a monthly and annual basis, with annual appreciation of over 10 percent on an annual basis.. We expect the 10-City Composite (SA) to be flat from August to September, and the 20-City Composite (SA) to rise 0.1 percent. We expect annual appreciation to fall around one percentage point from August to September.

The September Zillow Home Value Index was up 6.5 percent annually in September, down from peak annual appreciation of 8.1 percent in April. The rate of annual appreciation has fallen every month since April, and we expect the slowdown to continue into 2015. The September Zillow Home Value Forecast calls for a 3 percent rise in home values from September 2014 to September 2015, less than half the rate of appreciation we saw in the past year. Annual appreciation in the national SPCS seasonally-adjusted series peaked at 10.9 percent in October 2013, and has fallen every month since December 2013. Further details on our forecast of home values can be found here, and more on Zillow’s full September (Q3) 2014 report can be found here.

More on the differences between SPCS and ZHVI can be found here. Our commentary on the revisions to the national S&P/Case-Shiller Index can be found here.