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- Today, Case Shiller and the Federal Housing Finance Agency (FHFA) released their housing price index data for June 2015.
- Case Shiller data showed that house prices rose roughly 5 percent in all three indices since June 2014. The 10-city composite gained 4.6 percent, the 20-city composite rose 5.0 percent, and the national index showed a gain of 4.5 percent year over year.
- The 10-city and 20-city indices have been in a narrow range since February 2015. In that time the 20-city index has shown annual gains each month of either 4.9 or 5.0 percent while the 10-city index has shown gains of either 4.6 or 4.7 percent.
- FHFA data showed that prices were up 5.6 percent in June. Prices have ranged between 5.4 and 5.7 percent year over year growth according to FHFA since February.
- Last week the National Association of Realtors® (NAR) reported rising prices in June and July. Price growth in the year ended July 2015 was 5.6 percent after a 6.4 percent rise in June 2015.
- Recent housing price data at the national level suggests that home prices continue to increase at a strong pace though the pace of increase may be stabilizing or even slightly weakening. Strong buyer demand and low inventories coupled with relatively low levels of new construction are continuing to push prices up and the keep housing market tipped in favor of sellers in most local markets.
- Of course, potential buyers and sellers should be sure to put the national numbers in the context of what is going on in their local markets. The fastest overall growth rates were seen in Denver (10.2%), San Francisco (9.5%), and Dallas (8.2%) in the year ending June 2015—a repeat of the last few month’s top markets. By contrast, Washington DC (1.6%) and Chicago (1.4%) were the slowest growing markets while Cleveland and New York (tied at 2.8%) rounded out the bottom four markets. Data shows that sellers in these somewhat weaker areas may not have as much power to demand higher prices for their homes given the local market. How does your market compare to the national price trends?
- NAR reports the median price of all homes that have sold while Case Shiller reports the results of a weighted repeat-sales index. Case Shiller uses public records data which has a reporting lag. To deal with the lag, Case Shiller data is based on a 3 month moving average, so reported June prices include information from repeat transactions closed in April, May, and June. For this reason, changes in the NAR median price tend to lead Case Shiller and may suggest that price growth could be slowing in the next few months but is likely to remain strong. The current strong pace needs to slow somewhat to keep housing prices in line with job and wage fundamentals.
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