S&P Case Shiller Index Shows Sharp Housing Price Gain

Strength in home prices is one of the biggest stories of the 2017 economy, reflected in S&P Case-Shiller data where October's seasonally adjusted gain for the 20-city index is a sharp 0.7 percent. For a second month in a row, all 20 cities show monthly gains led in October by Las Vegas at 1.4 percent and San Francisco at 1.2 percent. Adding to the strength is a sizable 5 tenths upward revision to September which now stands at 1.0 percent which, however, is offset in part by a 2 tenths downward revision to August to a 0.2 percent gain.

But the gain for October and the upward revision to September are tied to seasonal adjustments as the unadjusted index rose only 0.2 percent in October with September unrevised at 0.4 percent. October, compared to other months, is relatively slow for the resale market which is compensated for by a large upward adjustment. Year-on-year rates (comparing October this year with October last year) are much less affected by seasonal adjustments and here underlying strength is the signal, at 6.4 percent for a 2 tenths gain and the best rate since July 2014.

Lack of supply of available homes on the market is a central factor helping home prices not to mention the general acceleration in housing demand that is clearly underway.

Recent History Of This Indicator:
Home-price appreciation has been one of the high points of the 2017 economy, underlined by September's Case-Shiller report which came in at the high end of expectations showing gains for all 20 cities. Econoday's consensus for October is calling for a very strong 0.6 percent increase in the 20-city adjusted index. The consensus for the unadjusted monthly index is plus 0.5 percent with the consensus for the year-on-year rate at 6.3 percent.