The index for home prices increased in January at its fastest rate since November 2022 as supply constraints and inflation continue to raise prices, according to data from S&P Global.
The Case-Shiller U.S. National Home Price Index increased 6.0% year-over-year in January, up from 5.6% in December, according to a press release from S&P Global. Growth in home prices has steadily accelerated since May 2023, when it reached a recent low of -0.4% year-over-year after dropping dramatically from 20.7% in March 2022. (RELATED: Gov’t Releases Another Batch Of Data That Wipes Out Previous Economic Gains)
“U.S. home prices continued their drive higher,” Brian Luke, head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said in the press release. “Our National Composite rose by 6% in January, the fastest annual rate since 2022 … On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs.”
The U.S. National Index increased 0.4% in the month when seasonally adjusted, but declined by 0.1% when not adjusted, the press release reads. The composite indices for the top 20 and top 10 U.S. cities increased 0.1% and 0.2% in the month when seasonally adjusted, respectively.
Case-Shiller: national home price index rose 6.0% Y/Y in Jan, fastest rate since ’22; 10 largest cities rose 7.4%; 20 largest rose 6.6% w/ every city rising for 2nd month in a row; tell me more about inflation being under control… pic.twitter.com/beJeqozw3A
— E.J. Antoni, Ph.D. (@RealEJAntoni) March 26, 2024
Housing prices have seen the largest increase in the last year in San Diego, where they have jumped 11.2% annually and 1.8% month-to-month, according to S&P Global. Trailing San Diego, Los Angeles rose by 8.6% year-over-year, and Detroit rose by 8.2% annually.
High mortgage rates have heavily increased the cost of buying a home for most Americans, with the average for a 30-year mortgage measuring nearly 7% in March, up from the COVID-19 pandemic low of around 2.6%, but down from the recent peak of nearly 8% in October 2023, according to the Federal Reserve Bank of St. Louis.
Mortgage rates are facing upward pressure from hikes in the federal funds rate by the Federal Reserve, which is currently in a range of 5.25% and 5.50%, the highest in 23 years. The Fed set interest rates to that level in an attempt to dampen high inflation, which peaked at 9.1% and has contributed to the rise in home prices.
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