Annual home price gains beat expectations to reach a high as we start 2022, according to the latest Case-Shiller Index…(SP Global)
- Y-O-Y: The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 19.2% annual gain in January, up from 18.9% in December.
- M-O-M: The US National Index reported a 1.1% monthly gain in January, up from 0.9% in December.
Phoenix continues to lead the way (for the 32nd straight month) with a 32.6% year-over-year price increase, followed by Tampa (+ 30.8%) and Miami (+ 28.1%).
- Y-O-Y: The 20-City Composite and the 10-City Composite saw annual growth of 17.5% (+0.4%) and 19.1% (0.5%), respectively.
- M-O-M: The 20-City and the 10-City both reported monthly gains of 1.4%.
Craig J. Lazzara, Managing Director at S&P DJI, said the slowdown has not begun yet as this was the fourth-highest reading on record…
- “Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate. Even that modest deceleration was on pause in January. The 19.2% year-over-year change for January was the fourth-largest reading in 35 years of history…The macroeconomic environment is evolving rapidly. Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices.”
As we all witnessed the housing market heated up to start the year instead of cooling down the way many had anticipated. The market has stayed elevated, but as rates move closer to 5% cracks are starting to form. These are not the cracks that form before a collapse but cracks that are allowing forces to cool things down. However, with the Case-Shiller Index lagging 3 months behind, it could be mid-summer before we see any evidence of it. For now, it is full steam ahead.