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 2022 show that home price gains continued to drop across the United States with declining prices reported in the San Francisco and Seattle markets. More than 27 years of history are available for the data series and can be accessed in full by going to https://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 5.8% annual gain in December, down from 7.6% in the previous month. The 10-City Composite annual increase came in at 4.4%, down from 6.3% in the previous month. The 20-City Composite posted a 4.6% year-over-year gain, down from 6.8% in the previous month.

Miami, Tampa, and Atlanta reported the highest year-over-year gains among the 20 cities in December. Miami led the way with a 15.9% year-over-year price increase, followed by Tampa in second with a 13.9% increase, and Atlanta in third with a 10.4% increase. All 20 cities reported lower prices  in the year ending December 2022 versus the year ending November 2022. 

MONTH-OVER-MONTH

Before seasonal adjustment, the U.S. National Index posted a -0.8% month-over-month decrease in December, while the 10-City and 20-City Composites posted decreases of -0.8% and -0.9%, 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 posted decreases of -0.4% and -0.5%, respectively.

In December, all 20 cities reported declines both before and after seasonal adjustments.

ANALYSIS

"The cooling in home prices that began in June 2022 continued through year end, as December marked the sixth consecutive month of declines for our National Composite Index," says Craig J. Lazzara, Managing Director at S&P DJI.  "The National Composite declined by -0.8% in December, and now stands 4.4% below its June peak.  For 2022 as a whole, the National Composite rose by 5.8%, the 15^th best performance in our 35-year history, although obviously well below 2021's record-setting 18.9% gain.  We could record similar observations in the 10- and 20-City Composites.

"Prices fell in all 20 cities in December, with a median decline of -1.1%.  Moreover, for all 20 cities, year-over-year gains in December (median 4.4%) were lower than those of November (median 6.4%). We noted last month that home prices in San Francisco had fallen on a year-over-year basis.  San Francisco's decline worsened in December (-4.2% year-over-year); its west coast neighbors Seattle (-1.8%) and Portland (+1.1%) once again form the bottom of the league table.

"As was the case last month, December's best performers were all in the Southeast, with Miami (+15.9%) in the lead for the fifth straight month.  Tampa (+13.9%) and Atlanta (+10.4%) continued in second and third place, with Charlotte (+9.9%) not far behind.  Unsurprisingly, the Southeast (+12.5%) and South (+11.6%) were the strongest regions, and the West (+1.2%) continuing as the weakest.

"The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken."