Annual home price appreciation continued its upward trend in January, though signs of moderation are shining through on a monthly basis.
Prices were up 6% YOY, an increase from December’s 5.6% gain and the fastest annual rate since 2022, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index.
San Diego once again reported the highest annual gains at 11.2%, followed by Los Angeles with an 8.6% increase. Portland showed a 0.9% increase, the smallest YOY growth.
This is the second straight month of price growth in every city analyzed, putting U.S. home prices at a new all-time high, breaking every record set last year.
“While there is a large disparity between leaders such as San Diego versus laggards such as with Portland, the broad market performance is tightly bunched up,” Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said.
“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.”
The monthly data paints a different picture of the housing market today, however. Declines are becoming more common as high borrowing costs keep buyers sidelined, moderating price growth in some cities.
“Only Southern California and Washington D.C. have stood up the rising wave of interest rates and deliver positive returns to start the year. San Diego rose 1.8% in January, followed by DC with 0.5% and Los Angeles at 0.1%,” Luke added.
The latest Federal Housing Finance Agency House Price Index revealed similar trends, with prices down 0.1% from December but up 6.3% YOY.
“U.S. house prices declined slightly in January, marking the first decrease since August 2022,” said Dr. Anju Vajja, Deputy Director for FHFA’s Division of Research and Statistics. “However, the year-over-year house price growth remained near the historical average.”
Market analysts expect more inventory to loosen up through 2024, easing competition. That may slow down price growth.
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