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The Slow Down in the House Price Indexes


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
Jan-14 13.2% 11.4% 7.3% 6.3% 8.0% 9.1%
Feb-14 12.9% 11.8% 6.9% 5.6% 7.6% 9.2%
Mar-14 12.3% 11.0% 6.4% 5.7% 7.0% 9.1%
Apr-14 10.8% 10.0% 5.9% 5.3% 6.4% 8.4%
May-14 8.8% 5.3%
1Case-Shiller Composite 20
2FHFA Purchase Only Index SA
3Black Knight formerly LPS

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