I mentioned in this morning’s column that housing starts were collapsing in a federal report out Monday.
However, there’s no real clarity on where that’s coming from: Could have been the spike in lumber prices (since passed) or it could be the change in demand from declining birth rates, or maybe something as simple as people trying to figure out how to make house payments if they take a bigger plunge.
So with this as background, on to the Case-Shiller/S&P press release just out:
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 16.6% annual gain in May, up from 14.8% in the previous month. The 10-City Composite annual increase came in at 16.4%, up from 14.5% in the previous month. The 20-City Composite posted a 17.0% year-over-year gain, up from 15.0% in the previous month.
Phoenix, San Diego, and Seattle reported the highest year-over-year gains among the 20 cities in May.
Phoenix led the way with a 25.9% year-over-year price increase, followed by San Diego with a 24.7% increase and Seattle with a 23.4% increase. All 20 cities reported higher price increases in the year ending May 2021 versus the year ending April 2021.
Before seasonal adjustment, the U.S. National Index posted a 2.1% month-over-month increase in May, while the 10-City and 20-City Composites both posted increases of 1.9% and 2.1%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.7%, and the 10-City and 20-City Composites both posted increases of 1.7% and 1.8%, respectively. In May, all 20 cities reported increases before and after seasonal adjustments.
“Housing price growth set a record for the second consecutive month in May 2021,” says Craig J. Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI. “The National Composite Index marked its twelfth consecutive month of accelerating prices with a 16.6% gain from year-ago levels, up from 14.8% in April. This acceleration is also reflected in the 10- and 20-City Composites (up 16.4% and 17.0%, respectively). The market’s strength continues to be broadly-based:
all 20 cities rose, and all 20 gained more in the 12 months ended in May than they had gained in the 12 months ended in April. Prices in 18 of our 20 cities now stand at all-time highs, as do the National Composite and both the 10- and 20-City indices
What matters most, we think, is the shape of the curve of price growth. Sure looks like inflation blow-off territory, to us:
Unfortunately, the home prices on a constant dollar basis are not provided. That would be a reality check. But since no one but us seems much interestedf in reality anymore…. Well, you get the point!
Write when you get rich,