Home prices show the biggest increase since 2014

Home prices in the United States rose at their fastest pace in seven years in January, as supply fell to a new low.

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The Case Shiller Index of 20 cities posted a gain of 11.1% year over year, up from 10.2% the month before, the biggest jump since March 2014, while the index of 10 cities recorded an annual increase of 10.9%, up from 9.9% the previous month. On a monthly basis, the indexes for the 10 and 20 cities rose 0.8% and 0.9% between December and January, respectively.

Seasonally adjusted, these indices both increased 1.2%. In January, 19 out of 20 cities reported increases before seasonal adjustment, and all 20 cities reported increases after seasonal adjustment.

Meanwhile, the S&P CoreLogic Case-Shiller National House Price Index rose 11.2% in January, up from 10.4% the previous month, marking the highest annual price growth rate since February 2006 .

HOME SALE BULLETIN WHILE INVENTORY IS AT A LOW

Phoenix had the fastest home price growth for the 20th consecutive month, posting a 15.8% year-over-year increase, followed by Seattle with 14.3% and San Diego with 14.3%. 2%. The city with the slowest growth in house prices was Las Vegas, although it still represented a staggering 8.5% year-over-year gain.

“January’s data remains consistent with the idea that COVID encouraged potential buyers to switch from city apartments to suburban homes,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI, in a press release.

Lazzara noted that it is unclear whether the trend will fade as the pandemic is brought under control or whether higher demand will be a permanent change.

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The latest data comes as sales of existing homes fell 6.6% in February to a seasonally adjusted annual rate of 6.22 million units, according to the National Association of Realtors. However, sales of existing homes were still 9% higher in February compared to a year ago.

The housing stock hit a record low of 1.03 million units at the end of February, down 29.5% year-over-year from 1.46 million units, marking the largest annual decline since NAR began collecting data on home inventories in 1982.

Higher mortgage rates could slow sales down a bit in the coming months, but borrowing costs remain close to all-time lows. The average rate on a 30-year fixed mortgage rose to almost 3.2% last week, the highest since June, from 3.1% the week before. It’s still below the pre-pandemic rate of 3.5%

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According to the housing price index of the Federal Housing Finance Agency, also released on Tuesday, house prices nationwide were up 12% from a year ago and up by 1% month to month. The FHFA reported that house prices in the mountain region rose 14.8%, in line with regional data reported in the Case-Shiller indices.

The Associated Press contributed to this report