As 2020 winds down, the pace of home price appreciation continues to gear up.
The national Case-Shiller Home Price Index rose 8.4% year-over-year in October. The smaller 10- and 20-city composite indices grew more slowly, at 7.5% and 7.9% year-over-year, respectively. The annual rate of growth was faster in October than in September in all three main indices. On a monthly (seasonally adjusted) basis, the 10- and 20-city indices were each up by 1.6%, and the national index was up 1.7% from September.
| Zillow Forecast, Released 11/24/20 | Actual Case-Shiller Indices, Released 12/29/20 |
Historical Median Absolute Error* | |
|---|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.1% | 1.6% | 0.2% |
| 10-City Composite, Year-Over-Year (NSA) |
6.8% | 7.5% | 0.2% |
| 20-City Composite, Month-Over-Month (SA) |
1.1% | 1.6% | 0.2% |
| 20-City Composite, Year-Over-Year (NSA) |
7.3% | 7.9% | 0.1% |
| U.S. National Month-Over-Month (SA) |
1.2% | 1.7% | 0.1% |
| U.S. National Year-Over-Year (NSA) |
7.7% | 8.4% | 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 path of home prices in recent months has been nothing short of remarkable. In many places across the country, and in the nation overall, home prices are growing by some measures at their fastest pace in decades. Record low mortgage rates, a wave of households aging into homeownership and a limited number of homes for sale all combined to stoke competition for houses and placed consistent upward pressure on prices for the better part of the last calendar year. These factors appear likely to remain in place in the near term, and an incrementally improving economy should encourage more buyers to enter the market. Taken together, this torrid pace of home price appreciation appears primed to continue well into 2021.
Monthly growth in November as reported by Case-Shiller is expected to slow slightly from October in all three main indices, while annual growth is expected to accelerate across the board. S&P Dow Jones Indices is expected to release data for the November S&P CoreLogic Case-Shiller Indices on Tuesday, January 26.
| Index | Actual Oct. Case-Shiller Change |
Zillow’s Forecast for the Case-Shiller Nov. Indices |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.6% | 1.5% |
| 10-City Composite, Year-Over-Year (NSA) |
7.5% | 8.4% |
| 20-City Composite, Month-Over-Month (SA) |
1.6% | 0.9% |
| 20-City Composite, Year-Over-Year (NSA) |
7.9% | 8.9% |
| U.S. National Month-Over-Month (SA) |
1.7% | 1.6% |
| U.S. National Year-Over-Year (NSA) |
8.4% | 9.5% |
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.