Case-Shiller: Annual Appreciation Slows in March
Today, the S&P/Case-Shiller Home Price Indices showed that the non-seasonally adjusted (NSA) February 10- and 20-City Composites rose 12.6 percent and 12.4 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 1.2 percent from February to March. The table below shows how Zillow’s forecast compared with the actual numbers.
“The big annual gains in housing we’ve been seeing are the result of a witch’s brew of sorts, concocted from a combination of an enormous decline in home prices during the bust, incredibly low mortgage rates and stubbornly high negative equity,” said Zillow Chief Economist Dr. Stan Humphries. “But these influences are beginning to fade, and we’re already seeing a monthly slowdown in home prices in more recent data. Housing prices already have or will soon surpass their pre-recession peaks in many areas, mortgage rates are rising and negative equity is receding. While we’re on the road back to normal, this process won’t happen overnight, and we’re still several years away from a housing market driven purely by fundamentals like income growth and rising household formations.”
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 February Case-Shiller indices compared, see our research brief from last month.