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Affordability · Home Prices · Inflation · Real Estate
U.S. home price growth decelerated in January, with the S&P Cotality Case-Shiller National Home Price Index reporting a 0.9% annual increase, down from 1.1% in December, as persistent affordability constraints continued to weigh on home buyer decisions, according to Dow Jones.
Nicholas Godec at S&P Dow Jones Indices highlighted that the National Index rose 2.2% in the first six months of the period but subsequently fell 1.3% in the most recent six months, explaining the compression in annual gains to under 1%. For the eighth consecutive month, inflation, as measured by CPI, outpaced national home price appreciation by 1.5 percentage points, resulting in modestly lower real home values year over year.
Godec further stated that with 30-year mortgage rates still near 6%, affordability constraints show no sign of easing, causing nominal prices to barely rise and real prices to edge lower. Regionally, New York recorded the highest annual gain at 4.9% in January, followed by Chicago with 4.6% and Cleveland with 3.6%, while Tampa posted the lowest return, falling 2.5%.
Cotality also reported transaction delays from the recording office in Wayne County, Detroit.
