Real Estate

Case-Shiller: U.S. home prices rise 3.9% in January

Experts warn January's reading is not indicative of current market conditions

January saw an annual increase of 3.9% for home prices across the country, rising from the prior month’s pace of 3.7%, according to the Case-Shiller Home Price Index from S&P Dow Jones Indices and CoreLogic.

During the month, the 10-City and 20-City composites reported a 2.6% and 3.1% year-over-year increase, respectively. And ten of 20 cities reported increases before seasonal adjustment, whereas 18 of 20 cities reported increases after seasonal adjustment.  

Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices, said last year’s trend of stable growth continued into the first month of the new year.

“Results for the month were broad-based, with gains in every city in our 20-City Composite; 14 of the 20 cities saw accelerating prices,” Lazzara said. “As has been the case since mid-2019, after a long period of decelerating price increases, the National, 10-City, and 20-City Composites all rose at a faster rate in January than they had done in December.”

According to the index, Phoenix; Seattle, and Tampa reported the highest year-over-year gains among all of the 20 cities.

“At a regional level, Phoenix retains the top spot for the eighth consecutive month, with a gain of 6.9% for January. Seattle, Tampa, and San Diego all rose by 5.1%,” Lazzara said. “Housing prices were particularly strong in the West and South, and comparatively weak in the Midwest and Northeast.”

That being said, Fourteen of the 20 cities measured in the index reported higher price increases in the year ending January 2020 versus the year ending December 2019.

Although January’s reading seems promising, Lazzara said the market must remember its data proceeds the COVID-19 pandemic, which has had a significant impact on the U.S. housing market.

“It is important to bear in mind that today’s report covers real estate transactions closed during the month of January,” he said. “The COVID-19 pandemic did not begin to take hold in the U.S. until late February, and thus whatever impact it will have on housing prices is not reflected in today’s data.”

George Ratiu,’s senior economist, said January’s data is not indicative of current market conditions as its lagging by a couple of months.

“Housing markets are beginning to feel the full impact of the coronavirus pandemic. A rising number of state governors have issued stay-at-home quarantine orders, effectively grinding most economic activity to a halt,” he said. “A recent survey of consumers from, covering the latter half of March, indicated that 36% of home shoppers consider that the U.S. has already entered a recession.”

“Given lessons learned from Asian countries, the U.S. is looking at a two- to three-month period of economic freeze. Real estate companies have moved to adapt and are offering a range of products aimed at streamlining the home buying process,” Ratiu said. “However, with fewer Americans able to move freely and many concerned about their jobs, real estate markets are entering a period of constrained activity.”

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