May Case-Shiller Forecast: Expect the Cooldown to Continue

On the heels of a larger-than-expected slowdown in April, Zillow anticipates Case-Shiller data to show a continued cooling in home price growth in May almost across the board, with prices even falling slightly from April in one key index.

Annual growth in all three main indices – the 10-city Composite, 20-city Composite and U.S. National Index – is expected to slow to 4.8 percent, 5.5 percent and 5.3 percent year-over-year growth in May, respectively, down from  4.9 percent, 5.7 percent and 5.5 percent in April. The U.S. National Index is expected to grow by a seasonally adjusted 0.2 percent in May from April, while prices will be unchanged from April on the 20-city Composite Index. Home prices are expected to fall by 0.1 percent from April to May on the smaller 10-city Composite Index (seasonally adjusted).

April’s slower-than-expected growth caught some analysts off-guard, especially the monthly figures. One potential reason cited for the surprise to the downside could be related to the difficulty in seasonally adjusting a repeat-sales index like Case-Shiller’s. Over the long term, Zillow’s monthly forecast of Case-Shiller data has proven remarkably accurate, thanks in large part to differences in methodology between Case-Shiller’s indices and Zillow’s, and the timeliness and granularity of data collected.

Zillow’s full forecast for May Case-Shiller data is shown below. These forecasts are based on today’s April Case-Shiller data release and the May 2017 Zillow Home Value Index. The May S&P CoreLogic Case-Shiller Indices will not be officially released until Tuesday, July 25.