September Case-Shiller Results & October Forecast: Taking Off in Earnest
Intense buyer competition has been driving home prices up for months, but prices as measured by Case-Shiller have just recently began to take off.
- The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 7% year-over-year in September (non-seasonally adjusted), up from 5.8% in August.
- Annual growth was up from August in both the 20-city index (to 6.6%, from 5.3%) and 10-city index (to 6.2% from 4.9%).
- Phoenix (+11.4%), Seattle (+10.1%), and San Diego (+9.5%) reported the highest year-over-year gains among markets in the 20-city index.
The weather cooled, but the pace of home price appreciation remained red hot into September.
The national Case-Shiller Home Price Index rose 7% year-over-year in September. The smaller 10- and 20-city composite indices grew more slowly, at 6.2% and 6.6% year-over-year, respectively. The annual rate of growth was faster in August than in July in all three main indices. On a monthly (seasonally adjusted) basis, the 10- and 20-city indices were each up by more than 1% (1.2% and 1.3%, respectively), and the national index was up 1.4% from August.
| Zillow Forecast, Released 10/27/20 | Actual Case-Shiller Indices, Released 11/24/20 |
Historical Median Absolute Error* | |
|---|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
0.7% | 1.2% | 0.2% |
| 10-City Composite, Year-Over-Year (NSA) |
5.7% | 6.2% | 0.2% |
| 20-City Composite, Month-Over-Month (SA) |
0.7% | 1.3% | 0.2% |
| 20-City Composite, Year-Over-Year (NSA) |
6.2% | 6.6% | 0.1% |
| U.S. National Month-Over-Month (SA) |
0.8% | 1.4% | 0.1% |
| U.S. National Year-Over-Year (NSA) |
6.6% | 7% | 0.1% |
| *Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011. The national Case-Shiller forecasts began in 2014. | |||
With mortgage rates staying near their lowest levels ever, buyers remain eager to grab the relatively few homes that are listed on the market, and do so quickly – homes went under contract two weeks faster in September than they did a year earlier. Home prices are normally sticky, meaning that they often take a while to respond to market shifts. These elevated levels of market competition have been placing upward pressure on prices for months, but home prices have just recently began to take off in earnest. Some measures show home prices now growing at a faster pace than they ever have. While the worsening spread of COVID-19, and the economic uncertainty that accompanies it, do pose some potential risks to the booming housing market, it appears unlikely that this remarkable growth in home prices will abate in the coming months.
Annual growth in September as reported by Case-Shiller is expected to accelerate in all three main indices. S&P Dow Jones Indices is expected to release data for the October S&P CoreLogic Case-Shiller Indices on Tuesday, December 29.
| Index | Actual September Case-Shiller Change |
Zillow’s Forecast for the Case-Shiller Sept. Indices |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.2% | 1.1% |
| 10-City Composite, Year-Over-Year (NSA) |
6.2% | 6.8% |
| 20-City Composite, Month-Over-Month (SA) |
1.3% | 1.1% |
| 20-City Composite, Year-Over-Year (NSA) |
6.6% | 7.3% |
| U.S. National Month-Over-Month (SA) |
1.4% | 1.2% |
| U.S. National Year-Over-Year (NSA) |
7% | 7.7% |
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.
