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U.S. home price growth continued to gain momentum to start the new year, with growth in January 2024 reaching its fastest annual rate since 2022, according to the S&P CoreLogic Case-Schiller Home Price Index released on Tuesday.
The National Home Price Index saw a 6 percent annual increase in January 2024, and a 0.4 percent increase month over month on a seasonally adjusted basis. In December, the index had increased 5.6 percent year over year.
“U.S. home prices continued their drive higher,” Brian D. Luke, head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said in a statement.
“Our National Composite rose by 6 percent in January, the fastest annual rate since 2022. Stronger gains came from our 10- and 20-city composite indices, rising 7.4 percent and 6.6 percent, respectively. For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2 percent. On a seasonal adjusted basis, home prices have continued to break through previous all-time highs set last year.”
As of December, the 10-city and 20-city composite Indexes had posted six months of annual gains, and were up by 7 percent and 6.1 percent, respectively. The 10-city composite tracks price growth in Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.
San Diego saw the most stunning annual price growth by far with its 11.2 percent annual increase in prices, but Charlotte and Chicago also saw impressive annual price growth, of 8.1 percent and 8.0 percent, respectively.
“We’ve commented on how consistent each market performed during 2023 and that continues to be the case,” Luke added.
“While there is a large disparity between leaders such as San Diego versus laggards such as with Portland [which only saw a 0.9 percent annual increase], the broad market performance is tightly bunched up. This is also true of high and low tiers. The average annual gains between high and low tiers across cities tracked by the indices is just 1.1 percent. Low price-tiered indices have outperformed high priced indices for 17 months. Homeowners most likely saw healthy gains in the last year, no matter what city you were in, or if it was in an expensive or inexpensive neighborhood. No matter which way you slice it, the index performance closely resembled the broad market.”
Some markets faced more challenges than others in terms of month over month home price growth as mortgage rates continued to be high, Luke noted. Seventeen markets dropped month over month, but Southern California and Washington, D.C. are two regions where growth was positive.
During the week of March 15, 30-year fixed-rate conforming mortgage rates averaged 6.97 percent, up from 6.84 percent the previous week. Requests for purchase mortgages are also down 14 percent year over year and down 1 percent week over week, on a seasonally adjusted basis, according to the MBA’s Weekly Applications Survey released last week.
