February Case-Shiller Results: My, What Big Home Prices You Have
Home prices continued their upward climb in February, as expected. The U.S. national index rose 5.8 percent from February 2016, after growing 5.6 percent year-over-year in January. Annual growth in both smaller 10- and 20-city indices continued in February, accelerating to annual paces of 5.2 percent and 5.9 percent, respectively, compared to 5.0 percent and 5.7 percent year-over-year growth in January.
Seattle, Portland and Dallas reported the largest year-over-year gains among the 20 cities. Seattle rose 12.2 percent in February, while Portland was up 9.7 percent. Dallas replaced Denver in the top three with an 8.8 percent increase.
Monthly growth in the U.S. national index slowed between January and February, growing a seasonally adjusted 0.4 percent after a 0.6 boost in home price growth between December and January. The 10-city index climbed 0.6 percent, and the 20-city index rose 0.7 percent between January and February — down from 0.9 percent between December and January.
Below are the actual February Case-Shiller numbers alongside Zillow’s forecasts for that month:
The 2017 spring home shopping season has started off with a bang, and at this point the strength of the market shouldn’t come as much of a surprise. February Case-Shiller numbers point to more fierce competition in the housing market. The thing to watch for now is when market conditions will shift, and change does seem to loom on the horizon, with rising mortgage interest rates and flattening rents. Both could put a dent in home-buyer demand and overall price growth and affordability. Those changes won’t necessarily be unwelcome, especially in some rapidly growing coastal markets in which buyers, sellers and renters could all use a breather. I’ll be watching for these changes to come gradually later in the year.
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