August 2021 Case-Shiller Results & Forecast: Beginning to Ease Off the Gas
House price growth through August sustained July’s unprecedented velocity, but autumn’s reports indicate that the market is easing off the gas pedal.
- The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 19.8% year-over-year in August (non-seasonally adjusted), unchanged from the prior month.
- Annual growth was down from July in both the 20-city index (to 19.7%, from 20%) and 10-city index (to 18.6% from 19.2%).
- Phoenix (+33%), San Diego (26.2%) and Tampa (+25.9%) reported the highest year-over-year gains among markets in the 20-city index.
House price growth through August sustained July’s unprecedented velocity, but autumn’s reports indicate that the market is easing off the gas pedal.
The national Case-Shiller Home Price Index rose 19.8% year-over-year in August. Annual growth was somewhat slower in both the smaller 20-city composite index (19.7%) and 10-city index (18.6%) The annual rate of growth was unchanged from July in the national index, and slightly slower in August than July in the 10- and 20-city indices. On a monthly (seasonally adjusted) basis, the national index was up 1.4% from July, while the 10- and 20-city indices were up 0.9% and 1.2% month-over-month, respectively.
| ZILLOW FORECAST, RELEASED 9/28/21 | ACTUAL CASE-SHILLER INDICES, RELEASED 10/26/21 |
HISTORICAL MEDIAN ABSOLUTE ERROR* | |
|---|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.7% | 0.9% | 0.2% |
| 10-City Composite, Year-Over-Year (NSA) |
18.9% | 18.6% | 0.2% |
| 20-City Composite, Month-Over-Month (SA) |
1.8% | 1.2% | 0.2% |
| 20-City Composite, Year-Over-Year (NSA) |
20% | 19.7% | 0.1% |
| U.S. National Month-Over-Month (SA) |
1.5% | 1.4% | 0.1% |
| U.S. National Year-Over-Year (NSA) |
20% | 19.8% | 0.1% |
| *Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011. The national Case-Shiller forecasts began in 2014. | |||
The national Case-Shiller Home Price Index rose nearly 20% year-over-year in August, tying July’s annual growth rate for the fastest pace in the series 21-year history. Home price growth in the summer was assisted by federal policy that placed restrictions on foreclosures, historically low mortgage interest rates and new home supply that has been curtailed by supply chain disruptions and labor shortages. In some white-hot markets, rapid appreciation was further accelerated by existing homeowners withholding supply in anticipation of continued rapid price growth or out of worry of being unable to find another property when their role switched from seller to buyer. While home builders continue to face shortages, fiscal and monetary policy is less favorable for buyers, and sellers are encountering more resistance. Compared to August, homes took a little bit longer to sell in September and the for-sale inventory inched higher. In other words, though extraordinary market conditions pushed house prices skyward between the Spring of 2020 and the Summer of 2021, the latest signs indicate that the market is relenting. And while house price appreciation will remain elevated for the next several months, further acceleration is unlikely.
Monthly growth in September as reported by Case-Shiller is expected to accelerate from August in both the 10- and 20-city indices, and slow in the national index. Annual growth in September is expected to accelerate in the 20-city and national index, and slow in the 10-city index. S&P Dow Jones Indices is expected to release data for the September S&P CoreLogic Case-Shiller Indices on Tuesday, November 30.
| INDEX | ACTUAL AUGUST CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER SEPTEMBER INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
0.9% | 1.3% |
| 10-City Composite, Year-Over-Year (NSA) |
18.6% | 18.5% |
| 20-City Composite, Month-Over-Month (SA) |
1.2% | 1.5% |
| 20-City Composite, Year-Over-Year (NSA) |
19.7% | 19.9% |
| U.S. National Month-Over-Month (SA) |
1.4% | 1.3% |
| U.S. National Year-Over-Year (NSA) |
19.8% | 20.2% |
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.
