United States: Home price growth hits one-year high in January
March 31, 2020
The S&P/Case-Shiller 20-city composite home price index was flat on a month-on-month basis in January, matching December’s figure. When adjusted for seasonal factors, home prices increased 0.3% in January, moderating from December’s 0.4% rise.
Home prices grew 3.1% on an annual basis in January, up for a revised 2.8% in December (previously reported: +2.9% year-on-year) and marking a one year high. Gains continued to be the strongest in Phoenix, which clocked in a robust 6.9% price growth, followed by Seattle and Tampa. Overall, 14 of the 20 cities in the index registered higher annual price growth in January in comparison to December.
Although the most recent housing data showcased a strengthening residential sector amid ultra-low mortgage rates and tight inventories, the economic downturn resulting from the Covid-19 pandemic will likely derail momentum in the real estate market and drag on home prices this year. Commenting on January’s result, Craig J. Lazzara, managing director and global head of index governance at S&P Dow Jones Indices, noted:
“It is important to bear in mind that today’s report covers real estate transactions closed during the month of January. The COVID-19 pandemic did not begin to take hold in the U.S. until late February, and thus whatever impact it will have on housing prices is not reflected in today’s data.”
Author: Lindsey Ice, Economist