YEAR-OVER-YEAR
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported an 18.8% annual gain in December, remaining the same from the previous month. The 10-City Composite annual increase came in at 17.0%, up from 16.9% in the previous month. The 20-City Composite posted an 18.6% year-over-year gain, up from 18.3% in the previous month.
Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in December. Phoenix led the way with a 32.5% year-over-year price increase, followed by Tampa with a 29.4% increase and Miami with a 27.3% increase. Fifteen of the 20 cities reported higher price increases in the year ending December 2021 versus the year ending November 2021.
MONTH-OVER-MONTH
Before seasonal adjustment, the U.S. National Index posted a 0.9% month-over-month increase in December, while the 10-City and 20-City Composites posted increases of 1.0% and 1.1%, respectively.
After seasonal adjustment, the U.S. National Index posted a month-over-month increase of 1.3%, and the 10-City and 20-City Composites posted increases of 1.4% and 1.5%, respectively.
In December, all 20 cities reported increases before and after seasonal adjustments.
ANALYSIS
"This month's report covers December 2021, and therefore brings our reporting on calendar 2021 to a close," says Craig J. Lazzara, Managing Director at S&P DJI. "For the year, the National Composite Index recorded a gain of 18.8%. This is the highest calendar year increase in 34 years of data, and substantially ahead of 2020's 10.4% gain. The 10- and 20-City Composites rose 17.0% and 18.6%, respectively – a record for the 20-City Composite, and the second-best year ever for the 10-City Composite.
"We have noted that for the past several months, home prices have been rising at a very high, but decelerating rate. The deceleration paused in December, as year-over-year changes in all three composite indices were slightly ahead of their November levels. December's 18.8% gain for the National Composite is the fifth-highest reading in history.
"We continue to see very strong growth at the city level. All 20 cities saw price increases in 2021, and prices in all 20 are at their all-time highs. December's price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 16 of them.
"Phoenix's 32.5% increase led all cities for the 31st consecutive month. Tampa (+29.4%) and Miami (+27.3%) continued in second and third place in December. Prices were strongest in the South (+25.7%) and Southeast (+25.6%), but every region continued to log impressive gains.
"We have previously suggested that the strength in the U.S. housing market is being driven in part by a change in locational preferences as households react to the COVID pandemic. More data will be required to understand whether this demand surge simply represents an acceleration of purchases that would have occurred over the next several years rather than a more permanent secular change. In the short term, meanwhile, we should soon begin to see the impact of increasing mortgage rates on home prices."
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% | 278.63 | 107.9% | 50.9% |
20-City | 206.52 | Jul-06 | 134.07 | Mar-12 | -35.1% | 285.63 | 113.0% | 38.3% |
10-City | 226.29 | Jun-06 | 146.45 | Mar-12 | -35.3% | 297.67 | 103.3% | 31.5% |
