September Case-Shiller Forecast: Look for Continued Modest Growth in Pace of Appreciation

The August S&P Case-Shiller (SPCS) data published today showed home prices rising on a seasonally-adjusted monthly basis, with slight rises in the 10- and 20- city indices and almost half a percentage point rise in the national index.

We expect the September SPCS to show similar slight increases of 0.1 percent for the 10-City Index and 0.2 percent for the 20-City Index from August to September. The national index is expected to gain half of a percentage point over the same period (seasonally adjusted). We expect the 10- City and national indices to both grow 4.7 percent for the year ending in September, and the 20-City Index to grow 5.1 percent, the same rates of annual appreciation reported for August.

All SPCS forecasts are shown in the table below. These forecasts are based on today’s August SPCS data release and the September 2015 Zillow Home Value Index (ZHVI), released October 26. The SPCS Composite Home Price Indices for September will not be officially released until Tuesday, November 24.

According to the Zillow Home Value Index (ZHVI), U.S. median home values rose 3.7 percent on an annual basis in September, but a handful of hot markets grew much more quickly. Denver and San Francisco experienced double-digit annual appreciation in home values, with Denver’s annual change in values topping 16 percent year-over-year. Nationally, year-over-year growth in rents slowed slightly from August to September. Rents are now rising at the same annual rate as home values: 3.7 percent. Looking at home values by home type, condominiums and co-ops are rising at an annual pace of 5.1 percent, compared to 3.7 percent for single-family residences. Condominiums values fell farther during the housing bust, falling 33 percent from their peak value to their bottom, compared to a 20 percent median loss in value from peak to trough for single-family homes.

The Zillow Home Value Forecast calls for a 2.4 percent rise in home values through September 2016. Further details on our forecast of home values can be found here.