Case-Shiller Index Has Slowest Annual Home Price Increase In A Year

Tyler Durden's picture

There is a reason why Case-Shiller titled its summary presentation of the April housing market based on its 20-City Composite index "Rate of Home Price Gains Drop Sharply." The reason is simple: in April the housing market, while still preserving some upward momentum, appears to stumbled severely in April, with the Y/Y increase in the 20-City composite rising "only" 10.8%, down from 12.37% the month before, and the lowest annual increase since April of 2013. And this time there is no snow to blame it on.

The disappointing print certainly took economists by surprise, who were expecting a 11.5% increase, meaning this was the biggest miss since March 2013.

And while we ignore the Seasonally Adjusted data, as Case-Shiller suggests we do, the monthly increase here pretty much explained what is going on: at a 0.19% sequential rate of increase, this was far below the 0.8% expected rise (down from 1.25% the month before), and is the lowest print since March 2012. At this pace, May home prices may even indicate a sequential decline. As a reminder, the last time we transitioned from rising hone prices to declining prices per Case Shiller was May 2010!.

From the report:

“Although home prices rose in April, the annual gains weakened,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “Overall, prices are rising month-to-month but at a slower rate. Last year some Sunbelt cities were seeing year-over-year numbers close to 30%, now all are below 20%: Las Vegas (18.8%), Los Angeles (14.0%), Phoenix (9.8%), San Diego (15.3%) and San Francisco (18.2%). Other cities around the nation are also experiencing slower price increases.


“While the annual numbers worsened, the monthly figures were seasonally strong. Five cities – Atlanta, Boston, Chicago, San Francisco and Seattle – reported monthly gains of 2% or more. Dallas and Denver gained 1.6% and continue to set new peaks. Boston and Charlotte are less than 10% away from their peaks.

The punchline, and where this all feeds into the Fed's monetary policy plans:

“Near term economic factors favor further gains in housing: mortgage rates are lower than a year ago, the Fed is expected to keep interest rates steady until mid-2015 and the labor market is improving. However, housing is not back to normal: prices are being supported by cash sales, low inventories and declining foreclosure and REO sales. First time home buyers are not back in force and qualifying for a mortgage remains challenging. The question is whether housing will bounce back before the Fed begins to tighten sometime next year.”

The answer, clearly, is no. And since housing, via the securitization pathway, is still not the private sector equivalent of "High Quality Collateral" it means that without a shadow of a doubt, the Fed will have to come back and resume monetizing debt some time in the next 6-12 months, even after it ends its current tapering phase.

Source: Case-Shiller

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Dr. Engali's picture

Fed tightening some time next year.....LOl......  yeah right.

pods's picture

The only thing they will be tightening is their collective sphincters when inflation starts skyrocketing.


SoilMyselfRotten's picture

Looks like gold min-pukes back on

max2205's picture

Please.  I need a double this year so I can move to the beach

Wait What's picture


bwaahaaahaaa! that imagery just made my morning.

they loosen, they tighten, and sometimes they lose all control.

european ones, in particular, blow a lot of hot air.

sphincters and central bankers have more in common than one would think.

orangegeek's picture

Yellen is buying houses starting................NOW!!!!

101 years and counting's picture

the Fed has been buying MBS (mortgages) for 5+ years now.  But the taper is having an effect as banks arent lending because they cant package all that shit and sell to the US taxpayer.....via the Fed.

JRobby's picture

They returned to "normal underwriting standards" only to find that with 30% of consumer income cut out of the formula, no one can qualify.

No doc returning 3, 2, 1...............

Four chan's picture

in detroit the patient has flatlined. with thousands of homes going no bid at any price.

ENTP's picture

Those pesky Millennials won't live beyond their means and purchase McMansions they don't really need.  Time to print moar!

LawsofPhysics's picture

The rent is too damn high.

same as it ever was...

Baby Eating Dingo22's picture

Futures of coure ignoring this. That can't last. All the ingredients are in place for a nasty leg down shortly after open

PPT will need to wear their waders today

Dr. Engali's picture

It's pretty bad when a "nasty leg down" is less than 1/2 of a percent.

LawsofPhysics's picture

I don't think you understand what "unforeseen" really means.


Please stop trying to predict "market" moves, that's impossible.  Simply try and recognize the truth, that there is no market for true price discovery on Wall Street.

MATA HAIRY's picture

Here is a quote from the more complete article on marketwatch:

" A separate measure on homes sold to or guaranteed by Fannie Mae and Freddie Mac saw no monthly appreciation in April. (Effectively, this is a “middle class” home-price index, since it excludes both FHA and jumbo loans.) "


So in reality the bottom 90 percent or so of all homes saw NO increase.
Middle class homes.

The corporate media is trying to persuade americans that housing
prices are going up, but they are not, not for the vast majority of

The housing price increases over the past two years or so
have been mainly confined to the upper 10 percent of homes. And
yet what is the headline here? That housing prices are climbing. But they are not!

The corporate media and the gov't and the corporations are doing their best to reinflate the housing bubble and lure ordinary people into going into massive debt for overpriced houses.


Pure evil.

JRobby's picture

The housing price increases over the past two years or so 
have been mainly confined to the upper 10 percent of homes


Cash buyers bidding up the prices of Ego Palaces. 

NoDebt's picture

Forget ego, we're becoming a two-class society.  Far more quickly than I ever thought possible.  It's been whittling away at us for decades, but since the crash, it's been gobbling up the middle class in huge clumps and bunches.

Real estate prices are now reflecting that.  

LawsofPhysics's picture

Exponential equations are indeed a bitch.

Dr. Engali's picture

"Forget ego, we're becoming a two-class society."


When the richest 1% own 46% of the global wealth, I'd say we are already there. Oh well at least they give us some cheese (there I threw in a little optimism for ya).