Case-Shiller Home Price Index Misses Expectations

Last week's FHFA house price index missed already subdued expectations as does this morning's Case-Shiller adjusted 20-city index, managing a 0.1 percent gain in June vs expectations for only 0.2 percent. Year-on-year, Case-Shiller is up 6.3 percent vs expectations for 6.5 percent. This reading peaked at 6.7 percent earlier in the year.

Weakness in the major cities of the Northeast and Midwest is offsetting price strength in the West and Florida. Prices in New York City fell 0.7 percent in the month with Detroit down 0.1 percent and Chicago unchanged. Las Vegas leads June with a 1.0 percent rise followed by Tampa at 0.6 percent and Miami, Phoenix, and San Diego all at 0.5 percent in the month.

In year-on-year terms, Las Vegas at 13.0 percent is now out in front of Seattle at 12.8 percent. Washington DC is the tail ender at plus 2.9 percent with Chicago not much better at 3.3 percent and New York at only 3.8 percent.

The housing sector is having a tough year with construction limited by labor constraints and high prices and buying demand also limited by high prices. Yet the ongoing sag in home prices, which started in the early part of what proved to be a disappointing Spring selling season, should begin to make homes more affordable and in turn help stimulate sales.