Zillow forecasts 1% Year-over-year decline for May Case-Shiller House Price index

Note: The Case-Shiller report is for May (really an average of prices in March, April and May). This data is released with a significant lag, see: House Prices and Lagged Data

I think it is too early to look for a year-over-year increase in Case-Shiller prices, although some analysts think it is possible in the May report. We are definitely getting close - and it will make headlines when it happens.

Zillow Forecast: Zillow Forecast: May Case-Shiller Composite-20 Expected to Show 1% Decline from One Year Ago

On Tuesday, July 31st, the Case-Shiller Composite Home Price Indices for May will be released. Zillow predicts that the 20-City Composite Home Price Index (non-seasonally adjusted [NSA]) will decline by 1 percent on a year-over-year basis, while the 10-City Composite Home Price Index (NSA) will decline by 1.3 percent on a year-over-year basis. The seasonally adjusted (SA) month-over-month change from April to May will be 0.8 percent for the 20-City Composite and 0.9 percent for the 10-City Composite Home Price Index (SA). All forecasts are shown in the table below and are based on a model incorporating the previous data points of the Case-Shiller series and the May Zillow Home Value Index data, and national foreclosure re-sales.

May is the fourth consecutive month with monthly appreciation for the Case-Shiller indices, with May projected to be a bit stronger than the previous two months.

Zillow's forecasts for Case-Shiller have been pretty close.

One of the keys this year is to watch the year-over-year change in the various house price indexes. The composite 10 and 20 indexes declined 2.2% and 1.9% YoY respectively in April, after declining 2.9% and 2.6% in March. Zillow is forecasting a significantly smaller year-over-year decline in May.