December Case-Shiller Index posts another monthly home price decrease

Full-year 2022 numbers solid, but year-over-year gains clearly slowing

December’s CoreLogic S&P Case-Shiller Index data confirmed the roller-coaster year endured by the residential real estate market in 2022, with the index continuing its trend of monthly price declines while growing on a year-over-year basis.

The national index posted a 5.8% annual increase due to momentum from the end of 2021 carrying over into the beginning of 2022. The full year still registered among the top half of the index’s historical series, with the 5.8% gain representing the 15th-best performance in its 35-year history.

But year-over-year gains are clearly slowing, with December’s increase down from the 7.6% annual growth seen in November. December’s annualized gain, in fact, was the smallest posted by the index since August 2020.

Furthermore, the index logged its sixth straight monthly decreased, falling 0.8% from November. Monthly decreases had been slowing, but with mortgage rates peaking in November, December saw its monthly slippage grow from 0.6% in the month prior. The national index is now down 4.4% from its June 2022 peak.

Both the 10- and 20-city composite subindices saw the same trend of deceleration. The 10-city composite index was up by 4.4% annually, while the 20-city index was up 4.6% as second- and third-tier metro areas continued to outpace their larger counterparts in home price growth. Notably, however, slowing appreciation was somewhat more pronounced in these smaller cities, as many of the more affordable markets that were homebuyer darlings during the height of the COVID-19 pandemic are now being hit harder by the decline in buyer purchasing power.


“Prices fell in all 20 cities in December, with a median decline of -1.1%,” said Craig J. Lazzara, managing director at S&P DJI. “Moreover, for all 20 cities, year-over-year gains in December (median 4.4%) were lower than those of November (median 6.4%).”

Pricey cities on the West Coast are seeing the most notable price deceleration, Lazzara added.

“We noted last month that home prices in San Francisco had fallen on a year-over-year basis,” he said. “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.”

Significant price declines appear to be on the way for some other markets as well — especially smaller metros that were destinations for buyers during the pandemic. Many are already seeing these declines. While San Francisco and Seattle were the only cities in the 20-city composite to see year-over-year price decreases, 15 other metros tracked by CoreLogic saw annualized price declines in December, including Boise, Idaho; and Reno, Nevada.


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