Econoday Report: S&P Case-Shiller HPI July 27, 2010

2010 Economic Calendar

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S&P Case-Shiller HPI

Released on 7/27/2010 9:00:00 AM For May, 2010

	Prior	Actual
10-city, not SA - M/M change	0.7 %	1.2 %
10-city, Seas. Adj. - M/M change	0.3 %	0.5 %
10-city, not SA - Yr/Yr change	4.6 %	5.4 %

Highlights
The Case-Shiller home price index shows prices showing strength during spring. The unadjusted composite 10 index in May jumped 1.2 percent, following a 0.7 percent surge the month before. The year-on-year rate improved to 5.4 percent from 4.6 percent in April. The unadjusted index, of course, reflects typical seasonal strength that occurs during spring and summer months-the peak of housing demand during the year. Nonetheless, the seasonally adjusted 10-city index was healthy with a 0.5 percent increase-matching the gain in April.

A caveat is that the Case-Shiller index is based on a three-month-moving average, so the May release is an average of the March-April-May period which included two months' of data boosted by special tax incentives. This makes interpreting the marginal move (latest month) tricky. Given that both April and May are above February and March percentages seasonally adjusted, the latest number still looks good.

Certainly, the recent string of SA advances is due in part to coming off a low base. Nonetheless, the latest report indicates that prices are holding despite the ending of special incentives. On the news, equity futures moved higher after already being boosted by favorable earnings reports from DuPont and Lockheed. Treasury yields also firmed.

Definition
The S&P/Case-Shiller home price index tracks monthly changes in the value of residential real estate in 20 metropolitan regions across the U.S. The composite indexes and the regional indexes are seen by the markets as measuring changes in existing home prices and are based on single-family home resales. The key composite series are for the longer-running, original 10-city composite series and the newer and expanded 20-city composite. A national index is published quarterly. The indexes are based on single-family dwellings with two or more sales transactions. Condominiums and co-ops are excluded as is new construction. The data are compiled for S&P by Fiserv, Inc. The S&P/Case-Shiller Home Price Indices are published monthly on the last Tuesday of each month at 9:00 AM ET. The latest data are reported with a two-month lag. For example data released in January 2008 were for November 2007. Why Investors Care

The Case-Shiller Home Price Index is based on repeat transactions. That is, appreciation or depreciation is for same houses resold. This index is probably the best measure of changes in home prices. While it covers the gamut of types of houses sold, it is limited to metropolitan areas.

Data Source: Haver Analytics

2010 Release Schedule

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