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U.S. home prices cooled in January, marking the seventh-consecutive month of declines, according to new data released Tuesday.
The U.S. National Home Price NSA Index, tabulated by S&P CoreLogic Case-Shiller, reveals a 0.5 percent month-over-month decline in home prices before seasonal adjustments in January. On an annual basis, the national index posted a 3.8 gain in prices, down from the 5.6 percent gain reported in December.
The composites representing prices for the 10 and 20 largest cities in the country posted monthly decreases of -0.5 percent and -0.6 percent, respectively. Year over year, the 10-city composite posted a 2.5 percent increase, down from 4.4 percent the previous month. The 20 city composite also charted a 2.5 percent increase, down from 4.6 percent in December.
Miami, Tampa and Atlanta scored the highest year-over-year gains out of the 20-city composite, increasing by 13.8, 10.5 and 8.4 percent respectively.
Miami was the only city to report a month-over-month price increase in January, at o.1 percent. The remaining 19 cities in the 20-city composite posted monthly declines, with the biggest decreases seen in expensive West Coast cities. San Francisco posted a 7.6 percent annual decline. Seattle fell by 5.1 percent and San Diego prices declined 1.4 percent.
“One of the most interesting aspects of January’s report is the continued weakness in home prices on the West Coast, as San Diego and Portland joined San Francisco and Seattle in negative year-over-year territory,” S&P DJI Managing Director Craig J. Lazzara said in a statement. “It’s therefore unsurprising that the Southeast continues as the country’s strongest region, while the West continues as the weakest.”
January’s numbers are indicative of an unusually slow winter housing market marked by high mortgage rates and high prices, experts said.
“The January S&P CoreLogic Case-Shiller Home Price Index confirms what we have been observing for months—rising mortgage rates and growing affordability challenges have led to slower home price growth,” Bright MLS chief economist Lisa Sturtevant said in a statement. “After two years of double-digit home price appreciation, the Case-Shiller Index indicates that home prices increased by 3.8% year-over-year in January. This is the slowest year-over-year price growth since the end of 2019.”
Other experts predicted prices would resume gradual month-over-month growth as data begins to reflect a busier spring homebuying season, but they will remain down year over year when compared to last years frenzied spring, which saw buyers attempting to lock in before mortgage rates shot up.
“As the market comes back to life this spring, prices are likely to rise month over month, but fall year over year, compared to last year’s frenzied spring shopping season when buyers raced to lock in lower mortgage rates,” Zillow Senior Economist Jeff Tucker said in a statement. “Just how much prices will rise from winter lows will depend on whether mortgage rates stabilize and creep downward or stay high and volatile.”
The Federal Housing Finance Authority’s House Price Index, also released Tuesday, reported that prices rose 0.2 percent in January, and were up 5.3 percent on a yearly basis.
