Home Prices Contract For 4th Month In A Row For August

Home prices contracted for a 4th straight month in August in Case-Shiller 20-city data, down 0.1 percent vs expectations for a gain of 0.1 percent. Prices declined in 12 of the 20 cities, not much improved from July when prices declined in 13 of the 20 cities. Contraction in the August data is most severe in Chicago, Minneapolis, and Detroit with Chicago and Minneapolis also posting very soft year-on-year rates of only plus 2.9 percent and plus 3.9 percent, respectively. The total year-on-year adjusted rate fell sharply, to plus 5.6 percent from plus 6.7 and 8.0 percent in the two prior months and a positive low double-digit trend going back to the beginning of last year. The 5.6 percent rate is the lowest since November 2012.

Unadjusted data are closely tracked in this report and tell the same story of price weakness. Month-over-month, the unadjusted 20-city index rose 0.2 percent vs expectations for a 0.4 percent gain. Year-on-year, the unadjusted index was up 5.6 percent (the same as the adjusted reading) vs expectations for 5.8 percent and a 6.7 percent reading in July. The unadjusted year-on-year rate is also the lowest since November 2012.

Price erosion in Case-Shiller's sample has been significant, a negative for homeowner wealth but a key positive for home sales which are also getting a boost from low mortgage rates and the improving jobs market.

Recent History Of This Indicator:
The S&P/Case-Shiller 20-city home price index (SA) contracted sharply in July, down 0.5 percent for the third straight decline and the steepest monthly decline in Case-Shiller 20-city seasonally adjusted data going back to November 2011. The year-on-year rate, which has been coming down steadily all year from the low double digits, came in at plus 6.7 percent for the lowest reading since November 2012 and down sharply from 8.0 percent in June.