U.S. home prices increased 0.5% on a seasonally adjusted basis in January compared with December and were up 3.9% compared with January 2019, according to the S&P CoreLogic Case-Shiller Indices.
Month-over-month, the index’s 10-city and 20-city composites each posted an increase of 0.3%.
Year-over-year, the 10-city composite increased 2.6%, while the 20-city composite posted an increase of 3.1%.
On an unadjusted basis, the national index was flat compared with the previous month.
The 20-city composite was also flat month-over-month, on an unadjusted basis, while the 10-city composite posted a 0.1% decrease.
Phoenix, Seattle and Tampa reported the highest year-over-year gains among the 20 cities.
Phoenix led the way with a 6.9% year-over-year price increase, followed by 5.1% increases in Seattle and Tampa.
“The trend of stable growth established in 2019 continued into the first month of the new year,” says Craig J. Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, in a statement. “As has been the case since mid-2019, after a long period of decelerating price increases, the national, 10-city, and 20-city composites all rose at a faster rate in January than they had done in December.
“At a regional level, Phoenix retains the top spot for the eighth consecutive month, with a gain of 6.9 percent for January,” Lazzara adds. “Seattle, Tampa, and San Diego all rose by 5.1 percent. Housing prices were particularly strong in the West and South, and comparatively weak in the Midwest and Northeast.”
In a separate statement, Frank Nothaft, chief economist for CoreLogic, says the report for January shows “a housing market with solid momentum prior to the COVID-19 pandemic.”
“Home buyer demand was supported by low mortgage rates and rising income, leading to a further rise in home prices,” Nothaft says. “The novel coronavirus has placed a cloud over the spring buying season, and home sales will likely be much lower than had previously been expected.”
Bill Banfield, executive vice president of Capital Markets for Quicken Loans, says “it’s yet to be seen how home prices will react” to the economic crisis being caused by the pandemic.
“I suspect once the stay-at-home orders are lifted, homebuyer demand will regain its footing, provided employment rebounds quickly,” Banfield says.