February Case-Shiller HPI

Yet another crunchy beating was dispensed to the Case-Shiller-HPI last month.

The low-tier index was down 4.1%, mid-tier was down 3.9%, and high-tier was down 2.7%. This continues the pattern seen in recent months where low-priced homes are still taking the brunt of it, but the high tier is now feeling the pain as well.

The aggregate index was down 3.6% for the month, for a total decline from the peak of 24.0 percent on the dot.

My "proxy" HPI (calculated using 3-month average of the single family size-adjusted median) did a pretty good job for February. The proxy predicted a decline of 3.8% vs. an actual decline of 3.6%. Below is the updated chart combining the HPI with predicted HPI (this will be updated for April next week).

Here’s a long-term look at the three tiers in nominal terms.

Here’s a look at the decline from the peak and long-term, but this time adjusted for CPI inflation. The low tier, despite the drubbing endured to date, still remains more historically overpriced compared to the other tiers.

The February HPI is calculated based on home sales that took place in December, January, and February. So assuming a fairly constant trend, the index level is more indicative of January prices than anything else. Evidence suggests that prices have declined further since then.