S&P CORELOGIC CASE-SHILLER INDEX REPORTS 5.5% ANNUAL HOME PRICE GAIN FOR CALENDAR 2023

Rhea-AI Summary

S&P Dow Jones Indices released the latest results for the S&P CoreLogic Case-Shiller Indices, showing a 5.5% annual gain in U.S. home prices for December 2023. San Diego led with an 8.8% increase, while 17 out of 20 major metro markets reported month-over-month price decreases. The 10-City Composite had a 7.0% increase, and the 20-City Composite saw a 6.1% rise. The U.S. National Index experienced a 0.4% month-over-month decrease, but after seasonal adjustment, all composites showed a 0.2% increase. Brian D. Luke of S&P DJI mentioned that despite headwinds, the indices hit seven consecutive record highs in 2023, with broad-based growth across markets.

Positive

• None.

Negative

• Decreases in month-over-month prices for 17 out of 20 major metro markets in December 2023
• U.S. National Index showed a 0.4% month-over-month decrease in December

Insights

Economist

The report on home prices by the S&P CoreLogic Case-Shiller Indices offers a nuanced picture of the U.S. housing market, which is a critical component of the national economy. Housing markets reflect broader economic trends, including consumer confidence, spending capacity and the health of the labor market. The indicated year-over-year growth in home prices, particularly the 5.5% national gain, suggests a robust demand for housing relative to supply, even in a climate of rising mortgage rates.

However, the month-over-month price decreases in 17 out of 20 major metro markets could signal a cooling period or market adjustment, possibly influenced by higher financing costs. This dichotomy between the year-over-year gains and the short-term declines highlights the complexity of current market dynamics, where regional disparities are evident. Markets like San Diego and Detroit outperforming with over 8% increases, while others like Portland show marginal growth, could indicate varying local economic conditions and potentially differing levels of market saturation or housing inventory.

From a long-term investment perspective, the housing market's performance can impact consumer wealth and spending and by extension, affect the performance of related sectors such as construction, home improvement retail and financial services. The data provided on the historical peaks and troughs of home prices also serves as a reference point for evaluating current market valuations against historical norms, which can be particularly useful for stakeholders in real estate and investment sectors looking to gauge market cycles.

Market Research Analyst

The S&P CoreLogic Case-Shiller Indices serve as a barometer for housing market trends, which in turn can influence stock market sectors related to real estate, construction and consumer goods. The reported year-over-year increases in the major indices are indicative of a housing market that has recovered and grown beyond pre-recession peaks. This growth trajectory is substantiated by the historical data comparison, showing a significant rebound from the troughs experienced in 2012.

The importance of seasonally adjusted data should not be underestimated, as it provides a clearer picture by eliminating the effects of seasonal variations. The fact that the seasonally adjusted figures show month-over-month increases, despite the non-adjusted figures indicating decreases, suggests underlying market strength that could reassure investors in the housing sector. The consistent growth above the 35-year trend growth rate may reflect a stable investment environment for real estate, albeit with the caution that recent cooling could affect short-term market performance.

Stakeholders should also consider the implications of the Federal Reserve's monetary policy on mortgage rates, which directly impacts the housing market's affordability and attractiveness as an investment. The nuanced understanding of these indices is crucial for investors who rely on them to make informed decisions about the real estate market's direction.

Financial Analyst

The S&P CoreLogic Case-Shiller Indices provide critical insights into the health of the U.S. housing market, a sector with significant influence on consumer spending and financial markets. The reported year-over-year increases in home prices, especially in a period of rising interest rates, may reflect a resilient demand for housing. This resilience has implications for companies within the housing supply chain, including homebuilders, real estate firms and mortgage lenders, which may see continued demand for their services despite the broader economic challenges.

Investors often consider real estate as a hedge against inflation and the data showing home prices outpacing the long-term average growth rate could reinforce this perspective. However, the month-over-month decreases might be an early indicator of a potential shift in the market that could impact the profitability and stock performance of companies tied to the real estate sector. The financial implications of these trends are multifaceted, affecting not only direct real estate investments but also the broader stock market through real estate investment trusts (REITs) and the performance of the financial sector.

It is crucial to monitor these indices alongside other economic indicators to anticipate possible shifts in consumer behavior and lending practices, which can have far-reaching effects on investment strategies and the overall economic landscape.

NEW YORK, Feb. 27, 2024 /PRNewswire/ -- S&P Dow Jones Indices (S&P DJI) 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 December 2023 show that 17 out of the 20 major metro markets reported month-over-month price decreases. More than 27 years of history are available for the data series and can be accessed in full by going to www.spglobal.com/spdji/en/index-family/indicators/sp-corelogic-case-shiller.

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 5.5% annual gain in December, up from a 5.0% rise in the previous month. The 10-City Composite showed an increase of 7.0%, up from a 6.3% increase in the previous month. The 20-City Composite posted a year-over-year increase of 6.1%, up from a 5.4% increase in the previous month. San Diego reported the highest year-over-year gain among the 20 cities with an 8.8% increase in December, followed by Los Angeles and Detroit, each with an 8.3% increase. Portland showed a 0.3% increase this month, holding the lowest rank after reporting the smallest year-over-year growth.

MONTH-OVER-MONTH

The U.S. National Index showed a continued decrease of 0.4%, while the 20-City Composite and 10-City Composite posted 0.3% and 0.2% month-over-month decreases respectively in December.

After seasonal adjustment, the U.S. National Index, the 20-City Composite, and the 10-City Composite all posted month-over-month increases of 0.2%.

ANALYSIS

"U.S. home prices faced significant headwinds in the fourth quarter of 2023," says Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. "However, on a seasonally adjusted basis, the S&P Case-Shiller Home Price Indices continued its streak of seven consecutive record highs in 2023. Ten of 20 markets beat prior records, with San Diego registering an 8.9% gain and Las Vegas the fastest rising market in December, after accounting for seasonal impacts."

"2023 U.S. housing gains haven't followed such a synchronous pattern since the COVID housing boom. The term 'a rising tide lifts all boats' seems appropriate given broad-based performance in the U.S. housing sector. All 20 markets reported yearly gains for the first time this year, with four markets rising over 8%. Portland eked out a positive annual gain after 11 months of declines. Regionally, the Midwest and Northeast both experienced the greatest annual appreciation with 6.7%."

"Looking back at the year, 2023 appears to have exceeded average annual home price gains over the past 35 years. With trend growth at the national level of 4.7%, a 5.5% return demonstrates solid, steady growth. While we are not experiencing the double-digit gains seen in the previous two years, above-trend growth should be well received considering the rising costs of financing home mortgages. We previously suggested that the surge in home prices during the COVID pandemic could have accelerated home ownership temporarily. The past two years reflect consistent growth slightly above trend, suggesting a more secular shift in home ownership post pandemic. In the short term, meanwhile, we should be able to measure the impact of higher mortgage rates on home prices. Increased financing costs appeared to precipitate home price declines in the fourth quarter, as 15 markets saw lower values compared to September." 

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 Peak (%)		Level	From Trough (%)	From Peak (%)
National	184.61	Jul-06	134.00	Feb-12	-27.4 %		310.67	131.8 %	68.3 %
20-City	206.52	Jul-06	134.07	Mar-12	-35.1 %		317.39	136.7 %	53.7 %
10-City	226.29	Jun-06	146.45	Mar-12	-35.3 %		332.85	127.3 %	47.1 %

 

Table 2 below summarizes the results for December 2023. The S&P CoreLogic Case-Shiller Indices could be revised for the prior 24 months, based on the receipt of additional source data.

	December 2023		December/November		November/October		1-Year
Metropolitan Area	Level		Change (%)		Change (%)		Change (%)
Atlanta	240.90		0.0 %		-0.3 %		6.3 %
Boston	320.15		-0.8 %		-0.3 %		7.2 %
Charlotte	270.80		-0.1 %		0.2 %		8.0 %
Chicago	197.27		-0.2 %		-0.3 %		8.1 %
Cleveland	182.81		-0.7 %		0.3 %		7.4 %
Dallas	290.49		-0.7 %		-0.6 %		2.1 %
Denver	310.31		-0.5 %		-0.9 %		2.3 %
Detroit	180.34		-0.7 %		-0.5 %		8.3 %
Las Vegas	285.14		0.2 %		0.2 %		4.2 %
Los Angeles	421.37		0.1 %		0.1 %		8.3 %
Miami	429.29		0.3 %		0.3 %		7.8 %
Minneapolis	232.00		-1.0 %		-0.8 %		2.9 %
New York	294.15		0.0 %		0.2 %		7.6 %
Phoenix	322.95		-0.6 %		-0.3 %		3.8 %
Portland	315.90		-1.0 %		-1.0 %		0.3 %
San Diego	413.45		-0.8 %		-0.4 %		8.8 %
San Francisco	341.25		-0.9 %		-1.1 %		3.2 %
Seattle	362.10		-0.5 %		-1.4 %		3.0 %
Tampa	382.11		-0.3 %		0.1 %		4.1 %
Washington	312.42		0.0 %		-0.3 %		5.1 %
Composite-10	332.85		-0.2 %		-0.1 %		7.0 %
Composite-20	317.39		-0.3 %		-0.2 %		6.1 %
U.S. National	310.67		-0.4 %		-0.3 %		5.5 %
Sources: S&P Dow Jones Indices and CoreLogic
Data through December 2023

 

Table 3 below shows a summary of the monthly changes using the seasonally adjusted (SA) and non-seasonally adjusted (NSA) data. Since its launch in early 2006, the S&P CoreLogic Case-Shiller Indices have published, and the markets have followed and reported on, the non-seasonally adjusted data set used in the headline indices. For analytical purposes, S&P Dow Jones Indices publishes a seasonally adjusted data set covered in the headline indices, as well as for the 17 of 20 markets with tiered price indices and the five condo markets that are tracked.

	December/November Change (%)				November/October Change (%)
Metropolitan Area	NSA		SA		NSA		SA
Atlanta	0.0 %		0.5 %		-0.3 %		0.2 %
Boston	-0.8 %		0.0 %		-0.3 %		0.2 %
Charlotte	-0.1 %		0.6 %		0.2 %		0.7 %
Chicago	-0.2 %		0.6 %		-0.3 %		0.5 %
Cleveland	-0.7 %		0.0 %		0.3 %		0.9 %
Dallas	-0.7 %		0.0 %		-0.6 %		0.1 %
Denver	-0.5 %		0.1 %		-0.9 %		-0.3 %
Detroit	-0.7 %		0.0 %		-0.5 %		0.1 %
Las Vegas	0.2 %		0.8 %		0.2 %		0.9 %
Los Angeles	0.1 %		0.7 %		0.1 %		0.5 %
Miami	0.3 %		0.6 %		0.3 %		0.7 %
Minneapolis	-1.0 %		-0.1 %		-0.8 %		0.0 %
New York	0.0 %		0.0 %		0.2 %		0.2 %
Phoenix	-0.6 %		0.2 %		-0.3 %		0.6 %
Portland	-1.0 %		-0.2 %		-1.0 %		-0.2 %
San Diego	-0.8 %		-0.1 %		-0.4 %		0.4 %
San Francisco	-0.9 %		-0.1 %		-1.1 %		-0.6 %
Seattle	-0.5 %		0.3 %		-1.4 %		-0.8 %
Tampa	-0.3 %		0.3 %		0.1 %		0.5 %
Washington	0.0 %		0.2 %		-0.3 %		0.1 %
Composite-10	-0.2 %		0.2 %		-0.1 %		0.3 %
Composite-20	-0.3 %		0.2 %		-0.2 %		0.2 %
U.S. National	-0.4 %		0.2 %		-0.3 %		0.2 %
Sources: S&P Dow Jones Indices and CoreLogic
Data through December 2023

 

For more information about S&P Dow Jones Indices, please visit www.spglobal.com/spdji.

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FOR MORE INFORMATION:

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S&P Dow Jones Indices' interactive blog, IndexologyBlog.com, delivers real-time commentary and analysis from industry experts across S&P Global on a wide-range of topics impacting residential home prices, homebuilding and mortgage financing in the United States. Readers and viewers can visit the blog at www.indexologyblog.com, where feedback and commentary are welcomed and encouraged.

The S&P CoreLogic Case-Shiller Indices are published on the last Tuesday of each month at 9:00 am ET. They are constructed to accurately track the price path of typical single-family homes located in each metropolitan area provided. Each index combines matched price pairs for thousands of individual houses from the available universe of arms-length sales data. The S&P CoreLogic Case-Shiller U.S. National Home Price Index tracks the value of single-family housing within the United States. The index is a composite of single-family home price indices for the nine U.S. Census divisions and is calculated quarterly. The S&P CoreLogic Case-Shiller 10-City Composite Home Price Index is a value-weighted average of the 10 original metro area indices. The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index is a value-weighted average of the 20 metro area indices. The indices have a base value of 100 in January 2000; thus, for example, a current index value of 150 translates to a 50% appreciation rate since January 2000 for a typical home located within the subject market.

These indices are generated and published under agreements between S&P Dow Jones Indices and CoreLogic, Inc.

The S&P CoreLogic Case-Shiller Indices are produced by CoreLogic, Inc. In addition to the S&P CoreLogic Case-Shiller Indices, CoreLogic also offers home price index sets covering thousands of zip codes, counties, metro areas, and state markets. The indices, published by S&P Dow Jones Indices, represent just a small subset of the broader data available through CoreLogic.

Case-Shiller^® and CoreLogic^® are trademarks of CoreLogic Case-Shiller, LLC or its affiliates or subsidiaries ("CoreLogic") and have been licensed for use by S&P Dow Jones Indices. None of the financial products based on indices produced by CoreLogic or its predecessors in interest are sponsored, sold, or promoted by CoreLogic, and neither CoreLogic nor any of its affiliates, subsidiaries, or predecessors in interest makes any representation regarding the advisability of investing in such products.

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SOURCE S&P Dow Jones Indices

FAQ

What was the annual gain in U.S. home prices for December 2023?

The annual gain in U.S. home prices for December 2023 was 5.5%.

Which city reported the highest year-over-year gain among the 20 cities?

San Diego reported the highest year-over-year gain among the 20 cities with an 8.8% increase in December.

How many major metro markets reported month-over-month price decreases?

17 out of the 20 major metro markets reported month-over-month price decreases.

What was the month-over-month change in the U.S. National Index for December 2023?

The U.S. National Index showed a 0.4% month-over-month decrease in December 2023.

Who mentioned that the S&P Case-Shiller Home Price Indices hit seven consecutive record highs in 2023?

Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, mentioned that the S&P Case-Shiller Home Price Indices hit seven consecutive record highs in 2023.