Today, the S&P/Case-Shiller Home Price Indices showed that the non-seasonally adjusted (NSA) December 10- and 20-City Composites rose 13.6 percent and 13.4 percent, respectively, on a year-over-year basis, in line with Zillow’s forecast released last month. On a seasonally adjusted (SA) monthly basis, the 10- and 20-City Composites each rose 0.8 percent from November to December. The table below shows how Zillow’s forecast compared with the actual numbers.

“December capped an undeniably great year in housing in 2013, though it definitely was not as strong as today’s Case-Shiller data indicates. Less distorted indices show national appreciation ending the year at roughly half the rate today’s data shows, which is still nothing to sneeze at,” said Zillow Chief Economist Dr. Stan Humphries. “But toward the end of the year, the market’s robust bounce off the bottom began to inevitably tail off, and that slowing momentum has carried over into the beginning of this year. After a long winter, the market is gearing up for a spring home shopping season that should be a bit smoother for buyers, with less investor competition and marginally more inventory. Looking further ahead, the market should continue its slow march back to normal, as annual appreciation rates fall to more sustainable levels around 3 percent, mortgage interest rates climb to levels closer to historic norms and negative equity continues to recede.”

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