While the Case-Shiller home price index rose modestly MoM (+0.87%), it continues to disappoint expectations with the 7th consecutive miss in a row. Notably, unadjusted the monthly rise in prices was just 0.1%. Year-over-year gains of 5.8% for the top 20 cities is the fastest price appreciation since July 2014 - thanks once again to seasonal adjustments.
7th miss in a row for the non-seasonally-adjusted data...
And the "improvement" in the headline data is all seasonal-adjustments:
Before seasonal adjustment, the National Index posted a gain of 0.1% month-over-month in November. The 10-City Composite was unchanged and the 20-City Composite reported gains of 0.1% month-over-month in November.
After seasonal adjustment, the National Index, along with the 10-City and 20-City Composites, all increased 0.9% month-over-month in November. Fourteen of 20 cities reported increases in November before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.
As Case-Shiller notes,
“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“Sales of existing homes were up 6.5% in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market. The consumer portion of the economy is doing well; like housing, automobile sales were quite strong last year.
Other parts of the economy are not faring as well. Businesses in the oil and energy sectors are suffering from the 75% drop in oil prices in the last 18 months. Moreover, the strong U.S. dollar is slowing exports. Housing is not large enough to offset all of these weak spots."
Finally, here is the 20 City Composite monthly increase on a seasonally adjusted basis:
And the lack of an "increase" on an unadjusted basis: