Amidst all the strife over the debt ceiling, today’s Case-Shiller release sort of got lost in the news.
As expected, the index for May (actually an average of March, April, and May) showed prices up about 1% compared to April, and down about 4% from last May, when prices were being buoyed by the soon-to-expire homebuyer tax credit. The full release is here. From that release:
Case-Shiller, because of various distortions caused by policies like the tax credits, now focuses on data that is not seasonally adjusted, so the May increase is being widely met with a yawn. There’s typically upward pressure on prices in the spring, and excess inventory is widely expected to produce further declines in the fall. Another graph from the press release:
We also got data on new home sales, which remain depressed at a very low level. Here’s a graph from Calculated Risk: The nonexistent rebound in new home sales, and the attendant depression in construction, is a key reason why the recovery has been so weak. New home sales will not rebound significantly until we see stronger household creation and work through some of the sizable backlog of existing homes.