Home prices increase at fastest rate in 34 years in December, but rising mortgage rates remain ...

[mahatmakanejeeves]

Source: MarketWatch

Economic Report

Home prices increase at fastest rate in 34 years in December, but rising mortgage rates remain a threat

Last Updated: Feb. 22, 2022 at 9:18 a.m. ET
First Published: Feb. 22, 2022 at 8:50 a.m. ET
By Jacob Passy

Economists expect that the pace of home-price growth will slow in the face of rising interest rates

The numbers: The S&P CoreLogic Case-Shiller 20-city price index posted a 18.6% year-over-year gain in December, up slightly from 18.3% the previous month. On a monthly basis, the index increased 1.5% between November and December.

Meanwhile, the Case-Shiller national home price index demonstrated 18.8% growth between 2020 and 2021 in December, in line with November’s reading.

“This is the highest calendar year increase in 34 years of data, and
substantially ahead of 2020’s 10.4% gain,” Craig J. Lazzara, managing director at S&P DJI, said in the Case-Shiller report.

The Federal Housing Finance Agency House Price Index showed that prices rose 17.5% between the fourth quarters of 2020 and 2021. Prices were up 1.2% between November and December, per the FHFA report.

What happened: Phoenix recorded the highest rate of home-price growth in the country in December, according to the Case-Shiller report, with a 32.5% year-over-year increase. As with the month prior, two Florida cities closely followed: Tampa with a 29.4% gain and Miami with a 27.3% rise.

{snip}

Read more: https://www.marketwatch.com/story/coming-up-s-p-case-shiller-and-fhfa-home-price-indexes-11645537850

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I got some flak (constructive flak, I mean) that Yahoo! Finance wasn't quite right in its reporting. Looking at MarketWatch and Yahoo! Finance, I feel as if I am looking at two different stories. Here's what I originally posted:

-- -- -- -- -- --

https://finance.yahoo.com/news/case-shiller-home-price-december-2021-140003675.html

Yahoo Finance

US home price growth stalls in the final month of 2021

Amanda Fung · Editor
Tue, February 22, 2022, 9:00 AM

Home price growth in the U.S. paused in the final month of 2021, but the full year logged in record gains.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted an 18.8% annual gain in December, unchanged from November. The 20-City Composite posted an 18.6% annual gain, up from 18.3% a month earlier. The 20-City results were higher than analysts’ expectations of an 18% annual gain, according to Bloomberg consensus estimates.

“For the year, the National Composite Index recorded a gain of 18.8%. This is the highest calendar year increase in 34 years of data, and substantially ahead of 2020’s 10.4% gain,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, in a statement. “The 10- and 20-City Composites rose 17.0% and 18.6%, respectively — a record for the 20-City Composite, and the second-best year ever for the 10-City Composite.”

Once again, Phoenix led the 20-City Composite by posting a 32.5% annual gain. The city has led that index for 31 straight months. Two cities in Florida, Tampa and Miami, followed by recording a 29.4% and 27.3% gain, respectively.

{snip}

[Ford_Prefect]

1. We've seen more than 20% hike and it has NOT stalled here in Montana. Rents are skyrocketing too.

One key factor is Global Warming driven migration. People leaving the fires on the West Coast and the severe weather in the South.

False news that there is less COVID here has sent some our way as well.

[unblock]

2. "Stalled" is basically a lie.

The S&P CoreLogic Case-Shiller 20-city price index posted a 18.6% year-over-year gain in December, up slightly from 18.3% the previous month. On a monthly basis, the index increased 1.5% between November and December.

https://www.marketwatch.com/story/coming-up-s-p-case-shiller-and-fhfa-home-price-indexes-11645537850?mod=personal-finance


So basically, they rounded down December's 18.6 and November's 18.3 percent year over year figures to be able to call it a stall... despite these being huge numbers, and December's number being higher than November's.

And it capping the biggest year in 34 years.

[mahatmakanejeeves]

3. Maybe Yahoo! Finance is not the best source? I can edit, if there's popular demand.

Even if there's not popular demand.

Thanks.

[unblock]

4. In this case the content is largely just extracts from the case-Schiller press release.

Yahoo's headline sucks, but headlines suck all over....

[mahatmakanejeeves]

5. I changed the 0P to make MarketWatch the source. Thanks. NT

[progree]

12. Fucking Yahoo Finance shows split screen: Biden's announcement; and Dow Jones

Yes, Biden's announcement of sanctions, Live, around 2:30 PM ET

in a split screen with the Dow Jones ticking away so you can see it, the number of points down for the day, and the percent down for the day, with all those numbers changing every second. Very distracting.

If anything, the Dow window was bigger than the Biden window.

I was watching full screen, the only way to change things was to exit full screen, try to enlarge it as much as I can with my browser tools, and then move the overall window over so that the part with the Dow is hidden off to the left.

Or I could have hung something over the Dow part - a couple sheets of paper, or somesuch. and a little tape.

[progree]

6. The NATIONAL index annual gain was 18.8% in both November and December

and that is what they are basing the headline on, and reasonably so, as the 20 city composite is a subset of that.

From the OP (back when it was the Yahoo Finance one. And separating the 2 key sentences into paragraphs for clarity):

US home price growth stalls in the final month of 2021

... Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted an 18.8% annual gain in December, unchanged from November.

The 20-City Composite posted an 18.6% annual gain, up from 18.3% a month earlier.

But I agree that "stalled" is a pretty strange way to characterize 18+ percent annual gains. More like the National index jumped and soared as much in December as in November.

Sort of like driving at 120 mph in a 60 mph zone. 5 minutes later I'm still driving 120 mph. Headline: my speed growth stalled.

[Farmer-Rick]

7. They read like 2 different stories

They are trying so hard to make Biden look bad that their headlines are basically lies.

So from reading these two stories, I think it's a good thing if you own a house because its value went up. And mortgage rates have gone up.

But here is the thing. I got a 15 year fixed rate mortgage in December 2021 for 2 percent. Went down from 4.5 percent. When I refinance for that 4.5 percent (from 6.5) we told the lawyer we would see him again in about 5 year. He said no, rates weren't going to go that low. Hehe.

Here's hoping you all took advantage of the drop in rates.

[DENVERPOPS]

10. The local and state politicians are crying all the way to the bank

Increased values automatically lead to massively increased property tax revenues. A windfall fortune for the politicians to spend.

In Colorado, I recently got our Property Tax Bill for 2022 and nearly had a heart attack, followed by a cerebral aneurism......
(63% higher property tax than last year) I will protest, but in past years they have just blown me off.........

I laugh at people who own houses and everyone of them takes delight at hearing how much more their homes are worth.
I guess they won't be laughing when they see their Property Taxes reflect that increase in value.......

WASF.

Oh, and a bonus in todays news: We are sitting at 2 degrees and it is noon here in Denver. Perfect timing for Xcel to announce a 51% increase in the Natural Gas they are supplying to heat our homes..................FIFTY ONE F***ING PERCENT.........
I guess it is Katie Bar The Door time for the massive number of us in the middle and lower classes....

[Farmer-Rick]

17. My rural county upped, almost double, our property taxes in 2008

Yup right after the crash and valued at the peak of the housing bubble before it popped. The county's excuse was because of the crash they needed more revenue???? So, no, we fought it tooth and nail. And got them reduced by 30 percent.

Fight it every way you can. You'd be surprised how many others will join your cause if you explain how they are being hijacked.

[DENVERPOPS]

26. Yea

our county here in Colorado did the same thing back during the crash. Property values were down, so we expected a lower Property Tax.
NFW, in fact they had the gall to raise our taxes also.

Four years ago they did the almost doubling thing, and here we are in 2022 and they are having a repeat performance.
They will have all the money to play with that their little hearts desire......

I wonder if all those people who own homes in the areas of the horrific wildfire near Boulder will get higher tax notices with the 1000 homes obliterated????

I really wonder about what our kids and grandkids face in coming lifetimes. Obviously, the Republican Politicians must not have kids and grandkids, or just plain don't give a crap about anyone but themselves.........Biggest bunch of psychopaths and sadists ever rounded up in one place.........

[Joe Nation]

8. Thinking about selling this May

I'd like to relocate to the Pacific Northwest, and I am headed out tomorrow to look at real estate. I may just rent or if there is something I can purchase that better suits my needs, I might go in that direction.

I'm worried that there will be nothing on the market and that rents will be sky high. Looking north of Seattle. Any insights into that market?

[thatdemguy]

9. I work in construction.

There are so many reasons why prices have gone up. Cost of material and supply issues is a big one, so are interest rates. There is a demand for houses that can not be kept up with. With no new land being made, and more people needing housing its the perfect storm.

You want to buy a house, there is more competition for the ones out there. Low interest rates make it easier to spend to more and you do. Now the next seller goes the house down the street sold for 5% more than the last, so I will try for 5% more than that one.

The ghost in the corner no one really want to talk about is the eviction moratorium, landlords could not evict people who did not pay rent ( for what ever reason ). So now they are sitting on empty rentals, as they would rather have a house sit empty than have a renter not pay. Yes some of them are close enough to break even that an empty house not getting wear and tear is less of a cost than renting and needing to repairs after tenants. So now those who rented also have to buy. Those who are still renting out houses are also trying to make up for a years lost rent in some places. ( not all )

I know a landlord, who rented his first house out, when he bought a second to live in. He went 17 months with no rent paid, he is now in foreclosure on both of his houses. He drained the little savings he had trying to pay the mortgage on the rental, then his wife lost her job, she was a middle manager. When her employer went remote for all the employees they found out they did not need middle managers.

[DENVERPOPS]

11. Add to that

the fact that the Corporations and Investors are no longer spending any money in Commercial Real Estate, but rabidly buying up all the Residential homes, apartments, condos they can lay their hands on...........

[inthewind21]

18. Simple Greed is a HUGE part

I work in the construction chain as well. As for rising costs, yes those exist. However, new construction neighborhoods are bid out months and years ahead. There's not a contractor out there that waits until construction starts to purchase the materials needed. So the rising costs BS being touted is just that to a large extent. A planned new construction neighborhood that was approved in 2020 and will take a year or two to complete was bid out and pricing locked way before the "oh it's price increases but, we're making record profit" BS started. New construction contracts now come with a clause. You contract with me today to purchase for 400K, it will take me 9-12 months to complete construction, but, if prices rise during that 9 months you, schmuck buyer, agree to cover those costs so your 400K house is now 480K." Even know joe contractor got bids 18 months ago and pricing was locked for that job And idiots all over this country are agreeing to this insanity and signing these contracts with a clause. And paying 5K in good faith at signing. and Overbidding stupid amounts to get the house. Without knowing what the actual price of said house will actually be until completion. And if you can't afford the new price, or don't want to afford it, yeah, you can walk away, but you'll be leaving your 5K behind. And the next schmuck in line will make the purchase for 525K.

[thatdemguy]

19. Well thats kind of funny

Due to the fact I work for a small few mil a year electrical contractor that does commercial work, to include apt and condo buildings. I cant lock prices in for commodities past a week. Yes gear and lighting lock in when I send out a PO, but nothing else does. My material prices have gone up about 50-75 % depending on the item ( wire the most ), my labor costs have gone up about 20% in the last 2 years. Most of my projects take between 6 and 18 months.
I am sure there is some deals with single family housing, but I would bet their is not a single lumber supplier who would lock in prices 2 years from now for a house you may build, but dont even know what model it is.

I know one custom home builder, who builds million plus houses. Buys a million bucks in lumber a year, and he was driving to home depots 4 hours away to buy 20 2x4's that the home depot just got in stock. Luckily for him that only lasted a month or so.

[inthewind21]

22. So

Condos and apartments are residential not commercial. Which indicates you are doing work for a commercial electrical contractor that also does work on already existing structures and not new construction. And it's clear your not familiar with the quoting/bidding/contracting process with say a 400 unit apartment building or a 1200 unit housing addition.

[thatdemguy]

24. No we do ground up new construction

To include currently 2 7 story apt buildings with 120 units in each building, both buildings have 7k sq ft of future retail space and under ground garages. I am the estimator who reviews all the contracts, and does the negotiation with the GC's. We also do rehabs of existing buildings, like the Aldi grocery store we just completed, in an existing shopping center.

We take what work we can get for the prices we want, we are fairly selective in what we do. We do most of our work in the DC area.

80-90 % of our work is ground up. To include the project below we finished last year.

[link:https://www.arha.us/ramsey-homes|

[inthewind21]

23. Huh

So you're a sub contractor.

[thatdemguy]

25. No we are fully licensed electrical contractor

We are not a GC.

[Polybius]

13. The government needs to somehow step in

Cheap houses for the poor and middle class. No more $850,000 bs two bedroom homes like in Staten Island.

[cinematicdiversions]

14. There are plenty of cheap houses. People just don't want to live there. NT

[inthewind21]

15. No

There are not. unless you consider 400K for under 1000 cheap. Anyone remember those crazy rapid property increases in 05-08. I do. Just wait, it's coming.

[cinematicdiversions]

16. The entire state of Ohio is filled with houses for 125k In fact there are about thirty states

filled with such houses.

You know who has the lowest homelessness in America? Mississippi. Why? Because even the poor can afford to live there.

[inthewind21]

21. Yes

But I don't happen to live in Ohio OR Mississippi. And Ohio and Mississippi are low income states and rank #3 (Mississippi) and #18 (Ohio) for poverty. Let's all move to Ohio and Mississippi where we too can have a 30K average income and maybe just maybe make that poverty list as well! There's a reason there's no mass migration to either of those states. Besides, neither state could handle a mass influx of people seeking affordable housing. But wait, it's wouldn't be affordable anymore would it?

[Igel]

28. Ironically, you agreed with the post.

"There are plenty of cheap houses. People just don't want to live there. NT"

In that, the poster was right; and you were right. There's affordable housing, people just don't want to live there.


There's such a surfeit of low-cost housing that it would take a mass exodus to really move the price of most of that housing. (I assume housing prices are a logistic curve, but that's gut-level "thinking".)

[cadoman]

27. one of the overlooked upsides to a lack of rental regulation as well

Housing becomes very affordable.

There is a very interesting segment of the market that most people are not aware of: informal, flophouse style rentals. I know persons in my neighborhood who would be homeless if it weren't for very cheap (think $100 to $200) monthly flophouse arrangements. They have close to zero amenities but are able to keep their possessions safe, cook a modest meal, and avoid the worst of the weather. It's a market segment that should be encouraged because it keeps people off the street and just about anyone with a pulse can afford it.

There are a LOT of land and structures going unused right now. We should be the party that crafts the legislation that puts it to use.

[thatdemguy]

20. I live in rural maryland 45 mins from baltimore there are houses under 200k

And they are 1500 sq ft on 1 acre, they are perfectly functional, just not updated. Heck there are some around 125k that are liveable but need serious work.

[JCMach1]

29. Housing should not be allowed as investment level commodities

This issue is going to have to be addressed as the Californication of the housing 'market' continues apace