by Bill McBride on 7/01/2014 02:10:00 PM
Tuesday, July 01, 2014
We are finally seeing the slowdown in the year-over-year (YoY) housing price indexes that many of us have been expecting based on supply and demand. With inventory increasing steadily - and by one measure now above 2012 levels for the same week - the price slowdown will probably continue (and we may see price index declines in some areas).
Note: on inventory, the NAR data for May indicated inventory was up 6.0% YoY, but still down 7.6% compared to May 2012. Comparing to 2012 is interesting because prices started to increase in early 2012 (my bottom call in February 2012: The Housing Bottom is Here).
As an example, the CoreLogic index released this morning showed an 8.8% YoY increase in May; a fairly large increase, but the smallest year-over-year increase since late 2012 - and down from a 11.8% YoY increase a few months ago.
This slowdown in the house price indexes (even though expected) is a key story for 2014. The next question is how much prices will slow. Zillow is forecasting their index will increase 2.9% over the next 12 months. This will be a key story for the rest of the year and in 2015.
Here is a table of several indexes through April and May.
|Year-over-year change for selected House Price Indexes|
|Case Shiller1||CoreLogic||FHFA2||Zillow||Black Knight3||FNC|
|1Case-Shiller Composite 20|
2FHFA Purchase Only Index SA
3Black Knight formerly LPS