U.S. Home Prices Still Rising at Steady Clip, According to Survey
Home prices continued rising at a steady clip in January, another sign that 2016 will offer more of the same in the housing market: tight inventory leading to rising prices and sales volatility.
The S&P/Case-Shiller Home Price Index, covering the entire nation, rose 5.4% in the 12 months ended in January, slightly greater than a 5.3% increase in December.
The 10-city index gained 5.1% from a year earlier and the 20-city index gained 5.7% year-over-year.
Economists surveyed by The Wall Street Journal expected a 5.8% increase in the 20-city index.
After years of volatility, home-price growth appears to have stabilized at an annual rate of close to 5%. But the pace of sales has fluctuated, in part because of a lack of homes for sale and because high prices have started to scare some buyers.
The hottest markets in the country, primarily on the West Coast, continued to show double-digit price gains, with Portland reporting an 11.8% year-over-year jump, Seattle showing a 10.7% gain, and San Francisco prices advancing 10.5%.
Economists expect home-price growth to moderate in 2016, as buyers begin to reach the limits of what they can afford, especially in the most expensive markets. That can crowd out first-time buyers, who may also face student loans and credit-card debt that make it difficult for them to take on a large mortgage.
“While low inventories and short supply are boosting prices, financing continues to be a concern for some potential purchasers, particularly young adults and first-time home buyers,” said David Blitzer, managing director at S&P Dow Jones Indices.
Sales of previously owned homes tumbled 7.1% in February from the prior month, the National Association of Realtors said last week. Realtors blamed the lack of inventory, rising prices, the January blizzard on the East Coast, and a slump in the stock market.
Still real-estate agents expect activity to pick up during the spring selling season. A forward-looking indicator—the number of existing homes that went under contract—rose 3.5% in February to its highest level in seven months, NAR said on Monday.
Rebecca Walter, an agent with Redfin in Portland, said she didn’t list a single home in February. “February was my slowest month in a long time,” she said. “However, she added, “activity has come back with a vengeance.”
Ms. Walter said she expects to list a dozen homes in the coming four to six weeks, as sellers gear up for the spring season.