YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 7.7% annual gain in November, down from 9.2% in the previous month. The 10-City Composite annual increase came in at 6.3%, down from 8.0% in the previous month. The 20-City Composite posted a 6.8% year-over-year gain, down from 8.6% in the previous month.
Miami, Tampa, and Atlanta reported the highest year-over-year gains among the 20 cities in November. Miami led the way with a 18.4% year-over-year price increase, followed by Tampa in second with a 16.9% increase, and Atlanta in third with a 12.7% increase. All 20 cities reported lower price increases in the year ending November 2022 versus the year ending October 2022.
MONTH-OVER-MONTH
Before seasonal adjustment, the U.S. National Index posted a -0.6% month-over-month decrease in November, while the 10-City and 20-City Composites posted decreases of -0.7% and -0.8%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month decrease of -0.3%, and the 10-City and 20-City Composites both posted decreases of -0.5%.
In November, all 20 cities reported declines before seasonal adjustments. After seasonal adjustments, 19 cities reported declines, with only Detroit increasing 0.1%.
ANALYSIS
"November 2022 marked the fifth consecutive month of declining home prices in the U.S.," says Craig J. Lazzara, Managing Director at S&P DJI. "For example, the National Composite Index fell -0.6% for the month, reflecting a -3.6% decline since the market peaked in June 2022. We saw comparable patterns in our 10- and 20-City Composites, both of which stand more than -5.0% below their June peaks. These declines, of course, came after very strong price increases in late 2021 and the first half of 2022. Despite its recent weakness, on a year-over-year basis the National Composite gained 7.7%, which is in the 74th percentile of historical performance levels.
"All 20 cities in our November report showed price declines on a month-over-month basis, with a median decline of -0.8%. Moreover, for all 20 cities, year-over-year gains in November were lower than those of October, with a median year-over-year increase of 6.4%. Interestingly, home prices in San Francisco were down by -1.6% year-over-year, the first negative result for any city since San Francisco's -0.4% decline in October 2019. This is the worst year-over-year result for San Francisco in more than 10 years (since a -3.0% result in March 2012). West coast weakness was not limited to California, as San Francisco was followed by Seattle (+1.5%) and Portland (+3.9%) at the bottom of the league table.
"In contrast, November's best-performing cities were clustered in the Southeast. Miami (+18.4%) was the best performer, followed by Tampa (+16.9%). November is the eighth consecutive month that one of our Florida cities has been the national leader. The month's bronze medal went to Atlanta (+12.7%), narrowly edging out Charlotte (+12.6%). Unsurprisingly, the Southeast (+15.1%) and South (+14.3%) were the strongest regions and the West (+4.0%) was the weakest.
"As the Federal Reserve moves interest rates higher, mortgage financing continues to be a headwind for home prices. Economic weakness, including the possibility of a recession, would also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken."
SUPPORTING DATA
Table 1 below shows the housing boom/bust peaks and troughs for the three composites along with the current levels and percentage changes from the peaks and troughs.
|
| 2006 Peak | 2012 Trough | Current | |||||
Index | Level | Date | Level | Date | From
| Level | From
| From
|
National | 184.61 | Jul-06 | 134.00 | Feb-12 | -27.4 % | 297.29 | 121.9 % | 61.0 % |
20-City | 206.52 | Jul-06 | 134.07 | Mar-12 | -35.1 % | 301.51 | 124.9 % | 46.0 % |
| 10-City | 226.29 | Jun-06 | 146.45 | Mar-12 | -35.3 % | 313.07 | 113.8 % | 38.3 % |
