Home-price growth accelerated in January as the supply of homes for sale fell to a new low.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 19.2% in the year that ended in January, compared with an 18.9% annual gain the prior month.
Home prices rose at a record pace in 2021 and have continued to climb this year as home-buying demand strongly outpaces the supply of homes for sale. Competition among buyers is leading to bidding wars, and many homes are selling above their list price.
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The inventory of homes for sale at the end of January slid to the lowest level on record since the National Association of Realtors began tracking total existing-home inventory in 1999.
“Home prices continued rising—even in the middle of a snowy January—as buyers rushed to find a home in order to beat rising mortgage rates,” said George Ratiu, senior economist and manager of economic research at Realtor.com. News Corp, parent of The Wall Street Journal, operates Realtor.com.
The Case-Shiller index, which measures repeat-sales data, reports on a two-month delay. Inventory ticked higher in February but remained far below normal levels, NAR said. The median existing-home price rose 15% in February from a year earlier, NAR said, to $357,300.
Mortgage-interest rates have climbed in recent weeks to the highest level since 2019. The combination of rising home prices and increased interest rates are making homeownership unaffordable for some buyers.
“We may soon begin to see the impact of increasing mortgage rates on home prices,” said Craig Lazzara, managing director at S&P Dow Jones Indices.
The Case-Shiller 10-city index gained 17.5% over the year ended in January, compared with a 17.1% increase in December. The 20-city index rose 19.1%, after an annual gain of 18.6% in December. Price growth accelerated in 16 of the 20 cities.
Economists surveyed by The Wall Street Journal expected the 20-city index to gain 18.6%.
Phoenix had the fastest home-price growth in the country for the 32nd straight month, at 32.6%, continuing its record streak in the top spot. Tampa, Fla., posted the second-fastest growth, at 30.8%.
A separate measure of home-price growth by the Federal Housing Finance Agency also released Tuesday found an 18.2% increase in home prices in January from a year earlier.
Write to Nicole Friedman at [email protected]
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