Case-Shiller: Home Prices ‘Continued to Drive Higher’ in January


U.S. home prices increased 0.4% on an adjusted basis in January compared with December and were up 6.0% compared with January 2023, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.

The index’s 20-city and 10-city composites – measuring home prices in the 20 largest U.S. metros – posted month-over-month increases of 0.1% and 0.2% respectively.

San Diego again reported the highest year-over-year gain among the 20 cities with an 11.2% increase in January, followed by Los Angeles at 8.6%.

Portland, though holding the lowest rank after reporting the smallest year-over-year growth, retained an upward trend with a 0.9% increase this month.

“U.S. home prices continued their drive higher,” says Brian D. Luke, head of commodities, real and digital assets at S&P Dow Jones Indices, in a statement. “Our National Composite rose by 6 percent in January, the fastest annual rate since 2022. Stronger gains came from our 10- and 20-city composite indices, rising 7.4 percent and 6.6 percent, respectively. For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2 percent. On a seasonal adjusted basis, home prices have continued to break through previous all-time highs set last year.”

Luke notes that while there are some contrasts between markets at the extreme ends of the growth performance curve, overall, home price growth has been fairly consistent across the U.S.

“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,” Luke says. “This is also true of high and low tiers. The average annual gains between high and low tiers across cities tracked by the indices is just 1.1 percent. Low price tiered indices have outperformed high priced indices for 17 months.”

“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,” he adds. “No matter which way you slice it, the index performance closely resembled the broad market.”

“On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs,” Luke says. “Seventeen markets dropped over the last month, while Minneapolis has posted a 2.4 percent decline over the prior three months. Only Southern California and Washington D.C. have stood up the rising wave of interest rates and deliver positive returns to start the year. San Diego rose 1.8 percent in January, followed by DC with 0.5 percent and Los Angeles at 0.1 percent.”

In a separate statement, Selma Hepp, chief economist for CoreLogic, says “while the strain of elevated mortgage rates continued to depress prices [in January], monthly decline slowed from larger declines seen in the previous two months and reflecting improvement in rates from the 2023 fall peak.”

“And while the majority of metros continued to see acceleration in annual gains, San Diego saw exceptionally strong increases in prices this winter bringing it to fastest appreciating among the 20 Case Shiller metros,” Hepp says. “However, relatively affordable metros in the Midwest continue to face increasing affordability challenges from higher rates with their home prices bucking under pressure and falling faster than seasonally observed prior to the pandemic.”

“Going forward, spring home buying season will elevate home prices from winter lows, however the rate of annual gains is likely to slow given the difficult comparisons with last year’s spring surge in home prices,” Hepp says. “Still, annual gains will remain solid and likely show another 3 percent to 4 percent increase this year.”

Photo: Breno Assis

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