Today, the S&P/Case-Shiller Home Price Indices showed that the non-seasonally adjusted May 10- and 20-City Composite declined 1.0% and 0.7% on a year-over-year basis, in line with Zillow’s forecast released last week. On a seasonally adjusted monthly basis, both the 10- and 20-City Composites rose 0.9% from April to May. The table below shows how our forecast compared with the actual numbers.

“May was a good month for housing with existing home sales almost 10% higher than year-ago levels, supply shortages in some markets, and a declining mix of foreclosure re-sales which particularly affect the Case-Shiller index. Moreover, all of the data that has come out in the two months since May indicates that the housing market is continuing to slowly heal,” said Zillow Chief Economist Dr. Stan Humphries. “We do think Case-Shiller will post some monthly declines in the back half of the year, but people shouldn’t be overly concerned as this will be a function of seasonality in the share of sales that are foreclosures which will rise as overall sales decline in the fall and winter. Overall, we remain cautiously optimistic that home values are at a bottom nationally even while our expectations for price appreciation in the next couple of years are muted.”

Our forecasting model incorporates previous data points of the Case-Shiller series, as well as Zillow Home Value Index data and national foreclosure re-sales. To see how Zillow’s forecast of the April Case-Shiller indices compared, see our blog post from last month.