The forces that have propelled home price growth to new highs over the past year remain in place and are offering little evidence of abating.
The national Case-Shiller Home Price Index rose 16.6% year-over-year in May. Annual growth in the smaller 20-city composite index exceeded the national pace (17.0%) and annual growth in the 10-city index (16.4%) almost matched national appreciation. The annual rate of growth was faster in May than in April in all three main indices. On a monthly (seasonally adjusted) basis, the national index was up 1.7% from April, while the 10- and 20-city indices were up 1.7% and 1.8% month-over-month, respectively.
| Zillow Forecast, Released 6/29/21 | Actual Case-Shiller Indices, Released 7/27/21 |
Historical Median Absolute Error* | |
|---|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.6% | 1.7% | 0.2% |
| 10-City Composite, Year-Over-Year (NSA) |
16.1% | 16.4% | 0.2% |
| 20-City Composite, Month-Over-Month (SA) |
1.7% | 1.8% | 0.2% |
| 20-City Composite, Year-Over-Year (NSA) |
16.5% | 17.0% | 0.1% |
| U.S. National Month-Over-Month (SA) |
1.7% | 1.7% | 0.1% |
| U.S. National Year-Over-Year (NSA) |
16.2% | 16.6% | 0.1% |
| *Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011. The national Case-Shiller forecasts began in 2014. | |||
The housing market’s historically tight inventory conditions finally started to ease in May, but that did little to immediately tame the record-strong home price appreciation that the market has experienced in recent months. The number available homes across the nation finally ticked up this spring, albeit from a historically low reference point, after spending most of the last year in a steady decline. Still, price pressures remain very firm and appear ready to stay that way in the months to come. Indeed, sharply-rising prices do appear to have priced out some home shoppers, particularly those looking to enter the market for the first time, and causing fatigue among would-be buyers. But overall demand for homes remains very firm, as bidding wars persist and the still-relatively few homes available for sales continue to fly off the shelves at a historically fast pace. Increased inventory levels should eventually help tame the record-high pace of price appreciation, but it’s going to take a while.
Monthly and annual growth in June as reported by Case-Shiller is expected to decelerate from May and April 2020 in all three main indices. S&P Dow Jones Indices is expected to release data for the June S&P CoreLogic Case-Shiller Indices on Tuesday, August 24.
| Index | Actual May Case-Shiller Change |
Zillow’s Forecast for the Case-Shiller June Indices |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.7% | 1.6% |
| 10-City Composite, Year-Over-Year (NSA) |
16.4% | 16.1% |
| 20-City Composite, Month-Over-Month (SA) |
1.8% | 1.7% |
| 20-City Composite, Year-Over-Year (NSA) |
17.0% | 16.5% |
| U.S. National Month-Over-Month (SA) |
1.7% | 1.7% |
| U.S. National Year-Over-Year (NSA) |
16.6% | 16.2% |
Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.