As we predicted yesterday, the June 10- and 20-City Composite Case-Shiller Home Price Indices (non-seasonally adjusted) rose on a month-over-month basis and fell on a year-over-year basis. Standard and Poor’s released the indices this morning. Yesterday, Zillow released our forecast of the two indices. The table below shows how our forecast compared with the actual numbers.

The May-to-June increase in the indices is relatively good news, but Zillow Chief Economist Stan Humphries warns that July and August will be quite a bit weaker given the steady stream of weak economic news buyers received in June (declining consumer spending, weaker GDP numbers, lower job growth, continued high first-time unemployment claims) and the economic rollercoaster of August (credit rating downgrades, stock market turmoil). This clearly had an impact on June home sales, which fell monthly, and pending home sales, both of which will translate into weaker home value trends.

Forecasts for both variants of the Case-Shiller Index are based on the current Zillow Home Value Index value for June, which we released as part of our Q2 report a couple weeks ago, the May Case-Shiller home indices numbers and the national percentage for foreclosure re-sales in June, which can be found in the Zillow real estate market reports. Having an index that is a month ahead of Case-Shiller and knowing the degree to which Case-Shiller is  contaminated by foreclosure re-sales makes for an easy forecast. See Figure 1 for a comparison of both variants of Case-Shiller and their corresponding analogues based on the Zillow Home Value Index.