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Tuesday, November 23, 2021

Update: The Coming Deceleration in House Price Growth

by Calculated Risk on 11/23/2021 09:16:00 AM

Last month, in the Real Estate Newsletter, I wrote: The Coming Deceleration in House Price Growth

Here is an update to the graph:

Not only is Case-Shiller released with a lag (the release next week will be for September, whereas the NAR release yesterday was for October), but the 3-month average means the September release will include sales in July and August too.

Although median prices can be distorted by the mix, and repeat sales indexes (like Case-Shiller and the FHFA) are more accurate measures of house prices, the median price index might provide earlier hints on the direction of prices.

House Prices Case-Shiller MedianClick on graph for larger image.

This graph - as of the NAR release in October 2020 (a year ago) - shows median prices started to take off, even though the most recent Case-Shiller report only showed a very modest pickup in prices.

This shows the lag in the Case-Shiller report.

The second graph - as of the NAR release yesterday - shows that Case-Shiller followed the median prices up, and that median prices are now falling.

House Prices Case-Shiller Median Note: the NAR YoY change in September 2021 was revised down, so there was a slight uptick in October prices YoY.

This suggests that Case-Shiller will start to show some deceleration later this year - but still be up solidly YoY.