Home Prices See Biggest Monthly Drop Since Polar Vortex As Case-Shiller Declines For Second Month

Case-Shiller's 20-city home price index dropped 0.1% MoM in October (on an unadjusted basis) - the second monthly drop in a row and biggest drop since the Polar Vortex. Year-over-year, home prices rose 4.5% - the weakest growth since October 2012. While this modestly beat expectations (+4.5% vs +4.4% exp.), it is the 11th month in a row of growth deceleration. Also of note: the Top 20 Composite index is now down for the second month in a row, dropping to 173.36. The question now is whether the downside momentum will pick up.

Worst annual gain since Oct 2012 and weaker 11 months in a row:

 

and the biggest monthly drop since The Polar Vortex:

 

Some more charts, showing the ongoing - and accelerating - slowdown.

Sequential change:

And Year over Year:

And from the report:

Year-over-Year

Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014 versus 4.8% in September.

Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, including San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earlier. Las Vegas led the declining annual returns with a decrease of -1.2%.

Month-over-Month

The National and Composite Indices were both slightly negative in October. Both the 10 and 20-City Composites reported a slight downturn, -0.1%, while the National Index posted a -0.2% change for the month. San Francisco and Tampa led all cities in October with increases of 0.8%. Chicago and Cleveland offset those gains by reporting decreases of -1.0% and -0.7% respectively.

October recorded mixed monthly figures. Ten cities recorded lower monthly figures while eight posted increases. Detroit and San Diego both reported flat monthly changes. San Francisco had the largest increase of all 20 cities at 0.8% month-over-month.
“After a long period when home prices rose, but at a slower pace with each passing month, we are seeing hints that prices could end 2014 on a strong note and accelerate into 2015,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Two months ago, all 20 cities were experiencing weakening annual price increases., Last month, 18 experienced weakness. This time, 12 cities had weaker annual price growth, but eight saw the pace of price gains pick up. Seasonally adjusted, all 20 cities had higher prices than a month ago.

“Most national economic statistics, other than those connected to housing, posted positive reports in November and early December. Third quarter GDP was revised to 5% real growth at annual rates, and unemployment was at 5.8% as payrolls added over 300,000 jobs in November. Housing was somber: housing starts pulled back 1.6%, existing home sales were at 4.93 million, down 6.1%, and new home sales were 438,000, down 1.6%, all in November.

Finally, the breakdown for housing:

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