Annual gains in U.S. home prices continued in January, as expected, with the national Case-Shiller home price index setting a 31-month high. Seattle, Portland, and Denver reported the largest year-over-year gains in the 20-city composite index for each of the last 12 months.
Annual gains in U.S. home prices continued in January, as expected, with the national Case-Shiller home price index reaching a 31-month high.
January data showed the U.S. national index rose 5.9 percent from January 2016, up from 5.7 percent growth recorded in December. Both smaller 10- and 20-city indices also accelerated annually in January, up 5.1 percent and 5.7 percent, respectively, compared to 4.8 percent and 5.5 percent year-over-year growth in December.
Seattle, Portland, and Denver reported the largest year-over-year gains among the 20 cities for each of the last 12 months. Seattle gained 11.3 percent in January, while prices grew 9.7 percent in Portland and 9.2 percent in Denver.
On a seasonally adjusted monthly basis, January Case-Shiller data show the U.S. national index tapped on the brakes between December and January, growing just 0.6 percent after a 0.7 boost in home price growth between November and December. The 10- and 20-city indices grew at the same 0.9 percent pace between December and January as they had between November and December.
Below are Zillow’s forecasts of January Case-Shiller data, along with the actual January Case-Shiller numbers released today.
Today’s data showed continued growth in home prices, but don’t account for the millions of home shoppers nationwide who pushed the start of their home shopping efforts into February and early March, hoping to get a jump on their competition in the face of persistently low inventory. By now, the familiar dynamics driving the U.S. housing market to new heights – namely, high demand from home buyers and a limited supply of homes for sale – are well-entrenched, and the next few months look to be as competitive and fast-moving as ever. Over the long-term, the prospect of rising mortgage interest rates looms large over the market. Rising rates may cool rapid home price growth – especially in more-expensive coastal markets – but will also dent overall home affordability. But rates are rising slowly and what inventory is available continues to fly off the shelves. Nobody should expect these overall market forces to shift meaningfully overnight.
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