The S&P CoreLogic Case-Shiller Indices released Tuesday, April 28, show just how swimmingly things were going for the U.S. housing market before disaster firmly took hold in the form of a novel coronavirus.
The U.S. National Home Price NSA Index portion of the closely followed metrics show a 4.2% year-over-year gain in single-family home prices for the month of February after recording a 3.9% year-over-year gain in January that pointed to a housing market poised for a big spring sales season.
That positive momentum across all nine U.S. Census regions was also reflected in the 10-city and 20-city indexes, which posted year-over-year gains of 2.9% and 3.5%, respectively, both somewhat higher than their January gains.
Indicating how broad the gains were in this trailing indicator of market conditions, all 20 cities in the 20-city index showed seasonally adjusted gains.
Phoenix led the way nationally with a 7.5% price increase year over year in February, the ninth straight month the fastest growth was recorded in the Valley of the Sun, followed by Seattle at 6.0% and Charlotte and Tampa at 5.2% each.
S&P Dow Jones Indices says it uses a base value of 100 in January 2000 to track the price path of typical single-family homes by combining matched price pairs of thousands of individual houses from available arms-length sales data.
The compass swings south
Don't expect the same upward movement when the next Case-Shiller index comes out at the end of May. "Importantly, today's report covers real estate transactions closed during the month of February and shows no signs of any adverse effect from the governmental suppression of economic activity in response to the COVID-19 pandemic," says Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
"As much of the U.S. economy was shuttered in March, next month's data may begin to reflect the impact of these policies on the housing market," Lazzara says in this week's release.
Millions of homeowners already are reflecting on the impact of the pandemic on their personal economies, with home mortgage forbearances tracking skyrocketing joblessness as businesses shut down across a country where most of the population remains under stay-at-home orders.
Prices hold steady, but sales and new builds are dropping
And while indications are that home sales are now beginning to crater, at least according to this week's report from the National Association of Realtors (NAR), prices thus far have held fairly steady for those homes that have sold.
NAR figures, in fact, showed the median price for existing homes of all housing types was up 8% year over year in March to $280,600, the 97th month of year-over-year gains.
But leading indicators aren't so promising. Architectural and design firms are reporting a sharp falloff in billings, and new home starts and sales showed a similar decline in the most recent federal reports.
Of course, as states reopen and more people get back to work, economic recovery may follow. But how fast and how broad remains to be seen, and much depends on controlling and combating a contagion that in just a few months has killed more Americans than died in Vietnam in nearly 20 years of war.