While it is two months delayed (and home sales have tumbled since) and before The Fed raised rates, Case-Shiller reports that home prices rose 0.84% MoM in October, beating expectations and the biggest monthly rise since March. While the YoY gains barely missed expectations at +5.54%, Miami, Tampa, and San Francisco all saw the biggest gains as Chicago, Cleveland, and San Diego saw the biggest drops in home prices.
It appears we are playing out the same seasonally-adjusted pattern as 2014...
Charts: Bloomberg
And yet, the rebound was once again all in the eye of the beholder: the seasonally adjusted data indeed shows the strongest montly increase since March:
While according to actual housing data, the monthly increase was the weakest since January.
In any case, here are the report details:
Before seasonal adjustment, the National Index posted a gain of 0.1% month-over-month in October. The 10-City Composite was unchanged and the 20-City Composite reported gains of 0.1% month-over-month in October. After seasonal adjustment, the National Index posted a gain of 0.9%, while the 10-City and 20-City Composites both increased 0.8% month-over-month. Ten of 20 cities reported increases in October before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month
On an annual basis, the S&P/Case-Shiller U.S. National Home Price Index recorded a slightly higher year-over-year gain with a 5.2% annual increase in October 2015 versus a 4.9% increase in September 2015. The 10-City Composite increased 5.1% in the year to October compared to 4.9% previously. The 20-City Composite’s year-over-year gain was 5.5% versus 5.4% reported in September.
“Generally good economic conditions continue to support gains in home prices,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices.
“Among the positive factors are consumers’ expectations of low inflation and further economic growth as well as recent increases in residential construction including single family housing starts. Inventories of existing homes have averaged around a five month supply for the past year, a level that suggests a fairly tight market with limited supplies. Sales of new single family homes, despite recent increases in construction, remain mixed to soft compared to the trend in existing home sales.
“The recent action by the Federal Reserve raising the Fed funds target rate by 25bp and spreading expectations of further increases during 2016 are leading some to wonder if mortgage interest rate might rise... but previous data suggest that potential home buyers need not fear runaway mortgage interest rates.”
Finally, these were the best and worst performing cities: San Francisco, Denver and Portland continue to report the highest year-over-year gains among the 20 cities with another month of double-digit price increases of 10.9% for all three. Twelve cities reported greater price increases in the year ending October 2015 versus the year ending September 2015. Phoenix had the longest streak of year-over-year increases, reporting a gain of 5.7% in October 2015, the eleventh consecutive increase in annual price gains.