Case-Shiller ‘Heading in the Right Direction’
Today, the S&P/Case-Shiller Home Price Indices showed that the non-seasonally adjusted (NSA) November 10- and 20-City Composites rose 4.2 and 4.3 percent, respectively, on a year-over-year basis. The U.S. National Index rose 4.7 percent year-over-year. Today’s data were in line with Zillow’s forecasts, released last month.
On a seasonally adjusted (SA) monthly basis, the 10- and 20-City Composites were both up 0.7 percent from October to November. The National Index rose 0.8 percent month-over-month (SA). The table below shows how Zillow’s forecast compared with the actual numbers.
“As we begin 2015, the housing market is heading in the right direction – slowing down, yes, but still making gains, and at a level much more in line with historic norms,” said Zillow Chief Economist Dr. Stan Humphries. “Lately, we’ve seen stronger home value appreciation at the bottom end of the market, among those homes most likely to be sought by first-time, entry-level buyers. These gains should help lift more lower-end homeowners from negative equity, freeing them to list their homes for sale and contributing to sorely needed inventory gains to meet burgeoning demand from millennials and other first-time buyers. This year ought to be much more friendly for buyers in general, after years in which sellers were in the driver’s seat in most markets. More inventory from both previously sidelined sellers and new construction, slowing price gains and continued low mortgage rates will all contribute to buyers feeling more comfortable this year than in previous years.”
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 October Case-Shiller indices compared, see our research brief from last month.