Case-Shiller Expected to Continue Recent Leveling-Off Trend in May

The April S&P/Case-Shiller (SPCS) data published today showed home prices continuing to rise slightly less than 5 percent annually for both the 10- and 20-city indices, and slightly more than 4 percent annually for the national index. April marks the eighth consecutive month in which the national home price index has appreciated at a less than 5 percent annual appreciation rate (seasonally adjusted).

In April, the 10-city index appreciated at an annual rate of 4.6 percent, compared to 4.9 percent for the 20-City Index (SA). The non-seasonally adjusted (NSA) 10-City Index was up 1 percent month-over-month, while the 20-City index rose 1.1 percent (NSA) from March to April. We expect the change from April to May to show increases of more than 1 percent (NSA) for both the 10- and 20-city indices.

All Case-Shiller forecasts are shown in the table below. These forecasts are based on today’s April SPCS data release and the May 2015 Zillow Home Value Index (ZHVI), published June 22. Officially, the SPCS Composite Home Price Indices for May will not be released until Tuesday, July 28.

Annual appreciation in the Zillow Home Value Index (ZHVI) peaked in April 2014 and has declined since then. In May, the U.S. ZHVI rose 3 percent year-over-year, with large metro areas experiencing a wide difference in home value performance.  The most sluggish large markets in May, according to the ZHVI, were Boston (up 0.2 percent annually), New York (down 0.1 percent) and Baltimore (down 0.3 percent), all in the Northeast. The four fastest-growing large markets all experienced double-digit annual home value appreciation (Denver, San Jose, Dallas-Fort Worth and San Francisco). In all four of these markets, home values have already surpassed their bubble-era peaks. The May Zillow Home Value Forecast calls for a 2.2 percent rise in home values through May 2016. Further details on our forecast of home values can be found here.

More on the differences between SPCS and ZHVI can be found here. Our commentary on recent revisions to the national S&P/Case-Shiller Index can be found here. To see how this month’s results compared to our forecast from last month, please click here.