Home-price growth was up again in January after recording a modest 0.01% in December, according to the latest S&P CoreLogic Case-Shiller National Home Price Index report released on Tuesday.
The index showed a 19.2% annual gain for the year ending in January 2022, up from 18.9% the month prior. After four consecutive months of declines, the index began to rise again in December. According to the report, the growth rate recorded in January is the fourth highest annual growth reading in 35 years.
“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, said in a statement. “Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate. Even that modest deceleration was on pause in January.”
The Case-Shiller 20-city home price index increased 19.1% year over year in January, up from 18.6% in December. All 20 cities analyzed reported month-over-month price increases and 16 out of the 20 cities reported higher price increases in the year ending in January 2022 versus the year ending in December 2021.
The 10-city index also rose in January, increasing from 17.1% year-over-year growth in December to a 17.5% increase in January.
“The strength in home prices continues to be very broadly based,” Lazzara said in a statement. “All 20 cities saw price increases in January 2022, with prices in 16 cities accelerating relative to December’s report. January’s price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them.”
Yet again, Phoenix, Tampa and Miami reported the highest year-over-year increases among the 20 cities analyzed, with annual increases of 32.6%, 30.8% and 28.1%, respectively.
With inventory remaining low, experts expect home price growth to continue, however, rising interest rates have the potential to slow some of this growth.
“The macroeconomic environment is evolving rapidly,” Lazzara said. “Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”
