S&P CoreLogic Case-Shiller Index Reaffirms Cooling US Housing Market
Investors are responding to a pair of mixed economic reports on Tuesday. In the first report, the S&P CoreLogic Case-Shiller Index continued to decline in November.
The second report, an important wage inflation measure for the Fed rose less than expected in the fourth quarter.
S&P CoreLogic Case-Shiller Index Weakens
The S&P Dow Jones Indices 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 November 2022 show that home prices declined across the United States.
The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 9.2% annual gain in November, down from 10.7% in the previous month.
The 10-City Composite annual increase came in at 8.0%, down from 9.6% in the previous month.
The 20-City Composite posted an 8.6% year-over-year gain, down from 10.4% in the previous month.
“November 2022 marked the fifth consecutive month of declining home prices in the U.S.,” says Craig J. Lazzara, Managing Director at S&P DJI.
“As the Federal Reserve moves interest rates higher, mortgage financing continues to be a headwind for home prices. Economic weakness, including the possibility of a recession, would also constrain potential buyers. Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.”
Employment Cost Index
The employment cost index, a barometer the Federal Reserve watches closely for inflation signs, showed employment costs increased at a slower than expected pace in the fourth quarter, indicating that inflation pressures on business owners are at least leveling off.
According to the Labor Department, the index increased 1% in the October-to-December period. That was a little below the 1.1% Dow Jones estimate and less than the 1.2% reading in the third quarter. It also was the lowest quarterly gain in a year.