Price-Shiller Home Price Index Moderating

Appreciation in home prices may not be moderating but it is far from spectacular, up 0.7 percent in February's 20-city adjusted index which is the softest reading since October. Year-on-year growth, at an unadjusted 5.4 percent, is down 3 tenths from January and also the softest showing since October.

Gains are strongest where they usually are, out West with both San Francisco and Denver up 1.5 percent on the month. San Diego, however, had a poor showing at only plus 0.2 percent and brings up the rear except for Washington, DC at plus 0.1 percent. Year-on-year, Portland and Seattle lead in the low double-digits with Washington once again at the bottom, at plus 1.4 percent, and New York second to last at only plus 2.1 percent.

The regional data have spots of weakness but, importantly, nothing in contraction. Housing prices at least are showing stability if not acceleration but are probably not strong enough to pull new sellers into the housing market nor perhaps, as far as household wealth and spending are concerned, strong enough to offset weak wage gains.

Recent History Of This Indicator:
February's gain of 0.4 percent for the FHFA house price index was very soft but forecasters see much more strength for Case-Shiller, at a consensus 0.7 percent for the adjusted 20-city index. But the year-on-year rate is expected to move down, not up, 2 tenths lower to plus 5.5 percent and below FHFA's 5.6 percent. Flat or not, home-price appreciation is still in the plus column and, given weakness in wages, is still a major key to household wealth this year.