Mortgage News April 7, 2023
In January, the S&P CoreLogic Case-Shiller U.S. National Home Price Index showed a seventh consecutive monthly drop in home prices. However, the decline was not as significant as in the previous months, which could be attributed to a period of reduced interest rates that motivated potential homebuyers to make a move.
The Case-Shiller index experienced a 0.5% decrease from December to January, bringing the reading down to 292.71. Although the national index still showed a slight increase year over year, the January reading was only 3.8% higher compared to the same period in the previous year. This represents a decline from the 5.6% growth rate observed in December 2022.
The 10-city and 20-city composite indices, which monitor the housing prices in the largest cities across the nation, showed only marginal growth on a year-over-year basis. In January, both indices recorded annualized gains of 2.5%. However, this represented a decrease compared to the previous month, with the 10-city index dropping from 4.4% growth in December and the 20-city index declining from 4.6% growth.
Craig J. Lazzara, Managing Director at S&P DJI, noted that the sluggishness in the market was widespread in January. He stated that without seasonal adjustment, 19 cities saw a monthly decrease in home prices, whereas only 15 cities recorded a decline when seasonally adjusted. Nevertheless, whether or not seasonal adjustment was applied, most cities’ drops in January were less significant than those observed in December.
Miami stood out as a city that exhibited impressive resilience in terms of housing prices among the largest metropolitan areas in the country. It was the only city that did not experience a decline in non-seasonally adjusted home prices in January. Miami also led the market with an annualized price increase of 13.8%, followed by Tampa at 10.5% and Atlanta at 8.4%.
On the opposite end of the spectrum, housing prices in West Coast cities still showed lackluster performance. San Diego (down 1.4% annually) and Portland, Oregon (-0.5%) were added to the list of cities with negative year-over-year price growth, which already included San Francisco (-7.6%) and Seattle (-5.1%). As expected, the West region had the poorest price performance, showing a yearly decline of 1.5%, whereas the South region, which had a 10.2% increase, remained the strongest region in terms of housing prices.
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