With today's release of the April S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.3% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 5.8% for the last twenty-six months. Today's S&P/Case-Shiller National Home Price Index (Nominal) reached another new high.

The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.3% from the previous month. The nonseasonally adjusted index was up 5.65% year-over-year.

Investing.com had forecast a 0.4% MoM seasonally adjusted increase and 5.9% YoY nonseasonally adjusted for the 20-city series.

Here is an excerpt of the analysis from today's Standard & Poor's press release.

"As home prices continue rising faster than inflation, two questions are being asked: why? And, could this be a bubble?" says David M. Blitzer Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "Since demand is exceeding supply and financing is available, there is nothing right now to keep prices from going up. The increase in real, or inflation-adjusted, home prices in the last three years shows that demand is rising. At the same time, the supply of homes for sale has barely kept pace with demand and the inventory of new or existing homes for sale shrunk down to only a fourmonth supply. Adding to price pressures, mortgage rates remain close to 4% and affordability is not a significant issue."

"The question is not if home prices can climb without any limit; they can’t. Rather, will home price gains gently slow or will they crash and take the economy down with them? For the moment, conditions appear favorable for avoiding a crash. Housing starts are trending higher and rising prices may encourage some homeowners to sell. Moreover, mortgage default rates are low and household debt levels are manageable. Total mortgage debt outstanding is $14.4 trillion, about $400 billion below the record set in 2008. Any increase in mortgage interest rates would dampen demand. Household finances should be able to weather a fairly large price drop." [Link to source]

The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.

For an understanding of the home price data over longer time frames, we think a real, inflation-adjusted visualization of the data is an absolute necessity. Here is the same chart as the one above adjusted for inflation using a subcomponent of Bureau of Labor Statistics' Consumer Price Index, the owners' equivalent rent of residences, as the deflator. Among other things, the real version gives a better sense of the dynamics of the real estate bubble that preceded the last recession.

The next chart shows the year-over-year Case-Shiller series, again using the seasonally adjusted data.

Here is the same year-over-year overlay adjusted for inflation with the Consumer Price Index owners' equivalent rent of residences.

For a long-term perspective on home prices, here is a look at the seasonally and inflation-adjusted Case-Shiller price index from 1953, the first year that monthly data is available. Because the CPI owners' equivalent rent of residences didn't start until 1983, we've used the broader seasonally adjusted Consumer Price Index.

To get an even better idea of the trend in housing prices over long time periods, we compare the change in the seasonally-adjusted Case-Shiller Home Price Index and the Consumer Price Index since 1953.