Case-Shiller Home Prices Beat Top Estimates

Home prices are bubbling a bit. First it was 3-1/2 year highs in last week's FHFA data and today Case-Shiller beats the top estimate with a very strong 0.8 percent monthly gain for a 6.4 percent year-on-year rate that matches November last year for another 3-1/2 year high.

If there are bubbles forming it's in the west. Seattle is out front at a 12.9 percent year-on-year gain with Las Vegas at 11.1 percent followed by San Francisco at 10.2 percent. The weakest price growth is in Chicago and Washington DC, both at 2.4 percent. Turning back to the west, all the cities are posting strong rates: LA and Denver at 7.6 percent, San Diego at 7.4 percent, and Portland at 7.1 percent.

Last week's FHFA data, which are broken out by census regions, were led by the mountain and pacific states. Jerome Powell, at last week's FOMC press conference, downplayed home prices as a risk to economic stability, and prices across most of the nation are growing at a healthy and sustainable rate -- with perhaps the west however an exception.