CME Case Shiller home price index futures are quoted lower after this morning's release of activity in March-May. As illustrated in the table below, the Feb '21 (G21) benchmark contracts are ~1-3 points lower from yesterday's close. Some element of this might be attributed to trades yesterday in HCIG21 and G23.
Bid/ask spreads have widened, and third-party activity is very quiet.
While G21 bid/ask spreads are wider, with one month to run, spreads on the front contract (Q20- Aug 2020) have tightened to ~2 points. Most contracts are quoted at slight premiums to the July indices - consistent with positive seasonal factors, and limited impact (during April to June) from Covid. I expect the August contract, and the next one (Nov '20-X20) to see an increase in activity as the debate about whether spring buying got pushed into a summer selling season, collides with the increase in Covid cases.
Please feel free to contact me if you have any questions about this blog, any aspect of using home price derivatives for hedging, or if you have any trading/hedging ideas that you'd like to explore.