Driven by strong demand and limited inventory, U.S. home prices increased 1.6% on an adjusted basis in January and were up 19.2% compared with January 2021, according to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index.
The index’s 10-city and 20-city composites, measuring home price growth in the 20 largest U.S. metros, both posted month-over-month increases of 1.8%.
Phoenix, Tampa, and Miami reported the highest year-over-year gains among the 20 cities in January. Phoenix led the way with a 32.6% year-over-year price increase, followed by Tampa at 30.8% and Miami at 28.1%.
In January, all 20 cities reported increases before and after seasonal adjustments.
“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” says Craig J. Lazzara, managing director at S&P DJI. “The 19.2 percent year-over-year change for January was the fourth-largest reading in 35 years of history.”
“Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate,” Lazzara adds. “Even that modest deceleration was on pause in January.”
However, home price growth could begin to decelerate again, due to rising interest rates.
“The macroeconomic environment is evolving rapidly,” Lazzara says. “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.”
Photo: Kostiantyn Li