Case-Shiller: U.S. home prices rise 3.9% in January


January saw an annual increase of 3.9% for home prices across the country, rising from the prior month’s pace of 3.7%, according to the Case-Shiller Home Price Index from S&P Dow Jones Indices and CoreLogic.

During the month, the 10-City and
20-City composites reported a 2.6% and 3.1% year-over-year increase,
respectively. And ten of 20 cities reported increases before seasonal
adjustment, whereas 18 of 20 cities reported increases after seasonal

Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said last year’s trend of stable growth continued into the first month of the new year.

“Results for the month were broad-based, with gains in
every city in our 20-City Composite; 14 of the 20 cities saw accelerating
prices,” Lazzara said. “As has been the case since mid-2019, after a long
period of decelerating price increases, the National, 10-City, and 20-City
Composites all rose at a faster rate in January than they had done in December.”

According to the
index, Phoenix; Seattle, and Tampa reported the highest year-over-year gains
among all of the 20 cities.

a regional level, Phoenix retains the top spot for the eighth consecutive
month, with a gain of 6.9% for January. Seattle, Tampa, and San Diego all rose
by 5.1%,” Lazzara said. “Housing prices were particularly strong in the West
and South, and comparatively weak in the Midwest and Northeast.”

That being said, Fourteen of the 20 cities measured in the
index reported higher price increases in the year ending January 2020 versus
the year ending December 2019.

Although January’s reading seems promising, Lazzara said the market must remember its data proceeds the COVID-19 pandemic, which has had a significant impact on the U.S. housing market.

is important to bear in mind that today’s report covers real estate
transactions closed during the month of January,” he said. “The COVID-19
pandemic did not begin to take hold in the U.S. until late February, and thus
whatever impact it will have on housing prices is not reflected in today’s

Ratiu,’s senior economist, said January’s data is not
indicative of current market conditions as its lagging by a couple of months.

“Housing markets are beginning to feel the full impact of the coronavirus pandemic. A rising number of state governors have issued stay-at-home quarantine orders, effectively grinding most economic activity to a halt,” he said. “A recent survey of consumers from, covering the latter half of March, indicated that 36% of home shoppers consider that the U.S. has already entered a recession.”

“Given lessons learned from Asian countries, the U.S. is looking at a two- to three-month period of economic freeze. Real estate companies have moved to adapt and are offering a range of products aimed at streamlining the home buying process,” Ratiu said. “However, with fewer Americans able to move freely and many concerned about their jobs, real estate markets are entering a period of constrained activity.”
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