S&P CoreLogic Case-Shiller Index Reaffirms Cooling US Housing Market

James Hyerczyk
Updated: Feb 1, 2023, 00:51 UTC

As the Federal Reserve moves interest rates higher, mortgage financing continues to be a headwind for home prices.

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.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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