Steel Markets

Home Prices Accelerate to Highest Annual Rate in 15 Years

Written by Sandy Williams

Home prices soared in January to an 11.2% annual gain, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index. The January rate jumped from 10.4% in December and was the highest annual rate gain since 2006.

The 20-city composite posted an 11.1% annual gain with all cities reporting higher prices, led by Phoenix, Seattle and San Diego.

“January’s data remain consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI. “This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years.” Lazzara added that it is still unclear if the shift from cities will be permanent.

On a month-over-over month basis, prices rose in 19 of the 20 cities. The only city to see a decline in the 20-city segment was Cleveland, Ohio, dipping just 0.1%.

Another home price index, the Federal Housing Finance Agency House Price Index, showed home prices up 12% from January 2020 to January 2021.

“While house prices experienced historic growth rates in 2020 and into the new year, the monthly gains appear to be moderating,” said Dr. Lynn Fisher, FHFA’s Deputy Director of the Division of Research and Statistics. “House prices increased by 1.0% in January, which is relatively still high, but represents the smallest month-over-month gain since June 2020.”

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