U.S. home prices stayed on their slide at the beginning of the year, but marked a slower drop as mortgage rates briefly eased the pressure on the national housing market.
Prices fell 0.5 percent month-over-month in January, according to the S&P CoreLogic Case-Shiller Index, and remain about 3.8 percent higher than a year ago. The monthly levels are down from a 5.8 percent year-over-year increase reported for December, which marked six months of slowing growth.
The index was led by major western markets. In San Francisco, a cold fog wrapped home prices in a 1.3 percent decline from December and down 7.6 percent since last year.
The outlook was sunnier in Florida, where Miami notched a 13.8 percent increase in prices from a year ago; it was the only major U.S. city where prices rose since December.
New York City home prices fell 0.4 percent from December to January but remain 5.2 percent higher on an annual basis. Chicago performed similarly, down 0.5 percent month-over-month but 4.8 percent higher than a year ago.
The Federal Reserve’s ongoing focus on reducing inflation mean “rates may remain elevated in the near-term,” according to Craig Lazzara, managing director at S&P DJI.
“Mortgage financing and the prospect of economic weakness are therefore likely to remain a headwind for housing prices for at least the next several months,” Lazzara said.
Los Angeles fell 0.2 percent since December and prices remain 0.9 percent higher than in 2022, while Dallas prices fell 0.9 percent through January but stayed 5.0 percent higher than last year.
Some signs of life emerged in January, including homes spending less time on the market and pending home sales partially rebounding from November lows.
Winter months are typically the worst for the nation’s housing market and prices are likely to rise from month to month, but slide year-over-year, Zillow senior economist Jeff Tucker said in a statement.
“Just how much prices will rise from winter lows will depend on whether mortgage rates stabilize and creep downward or stay high and volatile,” Tucker said.
Read more
