Home prices picked up the pace from +18.9% in December 2021 to +19.2% in January 2022, according to the S&P CoreLogic Case-Shiller Index.
Home Price Growth Increased +19.2% y/y in January
After taking a four-month breather of slowing or flat growth, January 2022’s year-over-year home price growth was the strongest January y/y increase in home price appreciation since this data series began, according to the S&P CoreLogic Case-Shiller Index.
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The index registered an increase of +19.2 y/y. The month-to-month index increased +1.13%, the largest monthly increase in this data series.
Average gains for all three price tiers kicked up in January. Home prices increased the most at the high tier, up +21.4% from 20.6% in December. Low-tier homes regained home prices at +20.1%, the slowest regain among the three price tiers. This relatively slow uptick in pricing likely reflects serious affordability challenges within this buyer pool.
The largest monthly home price gains were in warmer climates and the West.
January’s Home Price Gains Unsurprising
According to CoreLogic, these price gains are not surprising. Why? The number of for-sale homes in January continued to fall and once again hit new lows. Likewise, mortgage interest rates jumped to three-year highs. No doubt higher interest rates disincentivized existing homeowners to sell and buy a another, more costly home with a higher mortgage rate.
Homebuyers choosing to remain in this unbalanced housing market face yet another and even more competitive buying situation now. The data point proof? The CoreLogic MLS PIN data indicated that 66% of the houses that sold in March 2022 did so because owners paid more than the asking price in highly competitive bidding wars.
Year-over-Year Home Price Growth
For 31 consecutive months, Phoenix continued to rank #1 with the strongest home price growth. in the country
Take a look at home price growth y/y in January among metros within the 20-city index:
- Phoenix – +32.6%
- Tampa – +30.8%
- Miami – +28.1%
- Dallas – +27.3%
- San Diego – +27.1%
- Las Vegas – +26.2%
- Seattle – +24.6%
- Charlotte – +24.4%
- Atlanta – +22.5%
- San Francisco – +20.9%
- Denver – +20.8%
- Los Angeles – +19.9%
- Portland – +17.7%
- Detroit – +14.0%
- New York – +13.9%
- Cleveland – +13.3%
- Boston – +13.3%
- Chicago – +12.5%
- Minneapolis – +11.8%
- Washington DC – +11.2%
Since the pandemic onslaught, home prices have increased an average of +31%. In Phoenix and Tampa, home prices have soared compared to prices in March 2020. These metros’ home prices have increased +51% and 44%, respectively.
Inventory of For-Sale Homes Not Promising for 2022 Spring Home Buying Season
March is typically the month when more new listings come onto the market however, not this March. According to CoreLogic MLS data, new listings of for-sale homes in March were -25% below 2019 levels.
This seemingly relentless supply and demand imbalance will continue to exacerbate higher homeownership costs among buyers who can afford to buy and continue to exasperate buyers who can no longer afford to compete. Industry experts anticipate that home price growth will average +10% growth for 2022.
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Thanks to CoreLogic.