September 2021 Case-Shiller Results & Forecast: Slowing from a Gallop
House price growth in the United States galloped to the fastest pace ever recorded in the summer, but this pace slowed a little in the latest report.
- The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 19.5% year-over-year in September (non-seasonally adjusted), down from 19.8% in August.
- Annual growth was down from August in both the 20-city index (to 19.1%, from 19.6%) and 10-city index (to 17.8% from 18.6%).
- Annual growth was slower in September than in August in 14 of the 20 markets included in the 20-city index.
Pandemic-era house price growth in the United States galloped to the fastest pace ever recorded in the summer, but this pace slowed a little in the latest report.
The national Case-Shiller Home Price Index rose 19.5% year-over-year in September, down from 19.8% in August. Annual growth was also somewhat slower in September from August in both the smaller 20-city composite index (to 19.1%, from 19.6%) and 10-city index (to 17.8% from 18.6%). On a monthly (seasonally adjusted) basis, the national index was up 1.2% from August, while the 10- and 20-city indices were up 0.8% and 1% month-over-month, respectively.
| ZILLOW FORECAST, RELEASED 10/26/21 | ACTUAL CASE-SHILLER INDICES, RELEASED 11/30/21 |
HISTORICAL MEDIAN ABSOLUTE ERROR* | |
|---|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
1.3% | 0.9% | 0.2% |
| 10-City Composite, Year-Over-Year (NSA) |
18.5% | 18.6% | 0.2% |
| 20-City Composite, Month-Over-Month (SA) |
1.5% | 1.0% | 0.2% |
| 20-City Composite, Year-Over-Year (NSA) |
19.9% | 19.1% | 0.1% |
| U.S. National Month-Over-Month (SA) |
1.3% | 1.2% | 0.1% |
| U.S. National Year-Over-Year (NSA) |
20.2% | 19.5% | 0.1% |
| *Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011. The national Case-Shiller forecasts began in 2014. | |||
In September, the CoreLogic Case-Shiller 20-City House Price Index rose three times faster than it did in 2020, but its exceptional 19% annual growth rate is one percentage point slower than the record-setting July pace. House price appreciation is unsustainable at this rate. Over the last year, average hourly wages in the U.S. increased by less than 5%; if house price growth were to routinely increase four times faster than wages, then housing affordability would become an issue for a larger number of Americans. The most recent report from Zillow indicates that house price acceleration continued to slow in October, and the number of days that listed homes were available for sale inched higher. These are signs that astronomical house price growth is returning to earth, but the descent will be slow. With low mortgage interest rates, a robust job market, labor and materials shortages, and a deluge of first-time home buyers, house price growth will comfortably exceed historical averages over the next year.
Monthly growth in October as reported by Case-Shiller is expected to accelerate from September in both the 10- and 20-city indices, and slow in the national index. Annual growth in October is expected to slow in all three main indices. S&P Dow Jones Indices is expected to release data for the October S&P CoreLogic Case-Shiller Indices on Tuesday, December 28.
| INDEX | ACTUAL SEPTEMBER CASE-SHILLER CHANGE |
ZILLOW’S FORECAST FOR THE CASE-SHILLER OCTOBER INDICES |
|---|---|---|
| 10-City Composite, Month-Over-Month (SA) |
0.9% | 1.2% |
| 10-City Composite, Year-Over-Year (NSA) |
18.6% | 17.4% |
| 20-City Composite, Month-Over-Month (SA) |
1.0% | 1.4% |
| 20-City Composite, Year-Over-Year (NSA) |
19.1% | 18.8% |
| U.S. National Month-Over-Month (SA) |
1.2% | 1.0% |
| U.S. National Year-Over-Year (NSA) |
19.5% | 19.1% |
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.
