The January S&P CoreLogic Case-Shiller Home Price Index, released this morning, showed that home prices continued to rise in the first month of the new year, with the national and 20-city indices remaining at all-time highs, eschewing any housing market crash concerns.
Across the nine U.S. census divisions, home prices climbed to an annual rate of 6.0% from 5.6% in December, fueled by a 0.4% monthly jump. After seasonal adjustments, the 20-city index showed an increase of 0.1% month-over-month while climbing to a yearly gain of 6.6% from 6.2% in the previous month.
Today’s report comes as a follow-up to the red-hot December Case-Shiller report, in which home prices across both the 20-city and national indices touched new all-time highs. Indeed, the 20-city index rose 6.1% year-over-year, surpassing November’s 5.4% reading and higher than forecasts of a 5.9% increase.
San Diego, California, proved the fastest-growing city in terms of real estate prices, up 11.2% in January. On the flip side, Portland, Oregon, reported the smallest year-over-year growth of just 0.9%.
“While there is a large disparity between leaders such as San Diego versus laggards such as with Portland, the broad market performance is tightly bunched up,” said Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. “Homeowners most likely saw healthy gains in the last year, no matter what city you were in, or if it was in an expensive or inexpensive neighborhood.”
Case-Shiller Silences Housing Market Crash Fears Despite 7% Mortgage Rates
Even with mortgage rates trending around 7%, home prices have shown little sign of easing over the past year. With today’s increase, home prices in the largest 20 metropolitan cities have climbed for the past 12 consecutive months.
It seems the limited supply of homes has outweighed the suppressed demand for real estate over the past year. Indeed, mortgage applications, which serve as a proxy for housing demand, have been in the dumps of late, down about 14% from last year.
However, home price growth may be beginning to slow in some markets, according to Luke:
“On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs. Seventeen markets dropped over the last month, while Minneapolis has posted a 2.4% decline over the prior three months.”
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
