February Home Prices Surge Again

The S&P CoreLogic Case-Shiller national home price index rose 6.3% year over year in February to a non-seasonally adjusted (NSA) index of 197.01. The month-over-month percentage increase was 0.2%.

In all U.S. cities included in the 20-city home price index, January house prices increased year over year, and all 20 also posted NSA month-over-month increases. Seattle (12.7%), Las Vegas (11.6%) and San Francisco (10.1%) posted the largest year-over-year gains. Seattle (1.7%) posted the largest month-over-month increase, followed closely by Denver (1.2%), and Detroit and San Diego (1.1%). Chicago posted the smallest month-over-month rise, up just 0.1%.

The S&P CoreLogic Case-Shiller NSA home price indexes for February increased by 6.8% year over year for the 20-city composite index and by 6.5% for the 10-city composite index. Economists had estimated an NSA year-over-year gain in the 20-city index of 6.2%.

The Case-Shiller index tracks prices on a three-month rolling average. February represents the three-month average of December, January and February prices.

Danielle Hale, chief economist for Realtor.com, commented:

Home prices continue to go up, up, up. Based on sales prices from December, January, and February, Case Shiller estimates that prices rose 6.3 percent nationally, and each of the indices showed some acceleration or faster growth from last month.

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Average home prices for February remain comparable to their levels in the winter of 2007.

The chair of the S&P index committee, David M. Blitzer, said:

Home prices continue to rise across the country. … Year-over-year prices measured by the National index have increased continuously for the past 70 months, since May 2012. Over that time, the price increases averaged 6% per year. This run, which is still ongoing, compares to the previous long run from January 1992 to February 2007, 182 months, when prices averaged 6.1% annually. With expectations for continued economic growth and further employment gains, the current run of rising prices is likely to continue.

Increasing employment supports rising home prices both nationally and locally. Among the 20 cities covered by the S&P CoreLogic Case-Shiller Indices, Seattle enjoyed both the largest gain in employment and in home prices over the 12 months ended in February 2018. At the other end of the scale, Chicago was ranked 19th in both home price and employment gains; Cleveland ranked 18th in home prices and 20th in employment increases. In San Francisco and Los Angeles, home price gains ranked much higher than would be expected from their employment increases, indicating that California home prices continue to rise faster than might be expected. In contrast, Miami home prices experienced some of the smaller increases despite better than average employment gains.

Compared to their peak in the summer of 2006, home prices on the 10-city index remain down 2.5%. On the 20-city index, home prices are now 0.1% higher, the first time the index has broken through its high of 12 years ago. Since the low of March 2012, home prices are up 50.7% and 54.2% on the 10-city and 20-city indexes, respectively. On the national index, home prices are now 6.7% above the July 2006 peak and 47% higher than their low-point in February 2012.

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