S&P Dow
Jones Indices (S&P DJI) reported on Tuesday its Case-Shiller Home Price
Index, which tracks home prices in 20 U.S. metropolitan areas, soared 4.7 per
cent y-o-y in January 2025, following an unrevised 4.5 per cent y-o-y surge in December 2024. This was the strongest annual gain in house
prices since August 2024 (+5.2 per cent).
Economists had anticipated
a jump of 4.8 per cent y-o-y.
According to
the report, 19 of 20 cities recorded
y-o-y advances in home prices in January, led by New York (+7.7 per cent
y-o-y), Chicago (+7.5 per cent y-o-y), and Boston (+6.5 per cent y-o-y).
Meanwhile, Tampa (-1.5 per cent y-o-y) was the only city that registered y-o-y decrease
in home prices.
The
S&P/Case-Shiller U.S. National Home Price Index, which measures all nine
U.S. census divisions, climbed 4.1 per cent y-o-y in January, following an upwardly
revised 4.0 per cent y-o-y gain (from +3.9 per cent y-o-y) in the previous
month.
On a m-o-m
basis, the U.S. National Index and the 20-City Composite both recorded
a 0.1 per cent uptick in home prices.
Commenting on
the latest data, Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income
Tradables and Commodities at S&P Dow Jones Indices, noted that home price
growth continued to moderate in January, reflecting a 2024 story, when rising
mortgage rates throughout the year elevated monthly payment burdens, which,
combined with already high home prices, pushed affordability to multi-decade
lows in many regions. “This likely contributed to subdued activity in the back
half of the year, with both buyers and sellers exercising caution,” he added. “Inventory
constraints also remain a challenge, particularly in legacy metro areas, where
limited new construction continues to restrict supply.”