Not the most polite question, to be sure, but worth asking with the release of this morning’s Housing Data. Here’s the press release – see what you think:
HOME PRICES NOT SLOWING DOWN ACCORDING TO S&P CORELOGIC CASE-SHILLER INDEX
NEW YORK, MAY 29, 2018 – S&P Dow Jones Indices today released the latest results for the S&P CoreLogic Case-Shiller Indices, the leading measure of U.S. home prices. Data released today for March 2018 shows that home prices continued their rise across the country over the last 12 months.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 6.5% annual gain in March, the same as the previous month. The 10-City Composite annual increase came in at 6.5%, up from 6.4% in the previous month. The 20-City Composite posted a 6.8% year-over-year gain, no change from the previous month.
Seattle, Las Vegas, and San Francisco continue to report the highest year-over-year gains among the 20 cities. In March, Seattle led the way with a 13.0% year-over-year price increase, followed by Las Vegas with a 12.4% increase and San Francisco with an 11.3% increase. Twelve of the 20 cities reported greater price increases in the year ending March 2018 versus the year ending February 2018.
The charts on the following page compare year-over-year returns of different housing price ranges (tiers) for the top two cities, Seattle and Las Vegas.
Before seasonal adjustment, the National Index posted a month-over-month gain of 0.8% in March. The 10-City and 20-City Composites reported increases of 0.9% and 1.0%, respectively. After seasonal adjustment, the National Index recorded a 0.4% month-over-month increase in March. The 10-City and 20-City Composites posted 0.4% and 0.5% month-over-month increases, respectively. All 20 cities reported increases in March before seasonal adjustment, while 19 of 20 cities reported increases after seasonal adjustment.
“The home price increases continue with the National Index rising at 6.5% per year,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Seattle continues to report the fastest rising prices at 13% per year, double the National Index pace. While Seattle has been the city with the largest gains for 19 months, the ranking among other cities varies. Las Vegas and San Francisco saw the second and third largest annual gains of 12.4% and 11.3%. A year ago, they ranked 10th and 16th. Any doubts that real, or inflation-adjusted, home prices are climbing rapidly are eliminated by considering Chicago; the city reported the lowest 12-month gain among all cities in the index of 2.8%, almost a percentage point ahead of the inflation rate.“
In our view, the gains reported today are understandable: The Federal Reserve has been telling anyone who will listen that “Rates are going up!” There is also about an even-bet that they will follow through and actually raise at their June meeting in a few weeks.
All of which leads to deeper analysis, but that will be on the Peoplenomics side of the house tomorrow. For now, the main thing to be asking is “Are we in another Housing Bubble?”
Officially, no. But at what point do we cross the threshold?
Regardless of the data, with 20-minutes to the open, Dow futures were still down 150. Although, my earlier happy-dance at the prospect of down 200 is a bit muted, the decline is likely to be very much like a “morning after a three-day bender” for the market today.
The only real question is whether we will bounce back and close above critical support which is nearby?