Housing Prices Gains Cooled in January, But Analysts Aren’t Concerned
“The housing recovery may have taken a breather due to the cold weather,” said Standard & Poor Index Committee Chairman David Blitzer in a Tuesday report, explaining the slower-than-average pace of growth for United States housing prices in the first month of the year. With residential real-estate prices increasing at a slower rate in the 12 months through January, the monthly reading of the S&P/Case-Shiller home price index of property values in the 20 largest United States metropolitan regions showed that momentum in the housing market is cooling ever so slightly. Property values rose 13.2 percent from a year ago, the smallest gain recorded since August.
Compared to December, prices rose 0.8 percent on a seasonally adjusted basis. However, without that adjustment, prices ticked down 0.1 percent across all 20 major cities, mirroring the declines recorded in both December and November.
January’s slow pace of growth did not represent the beginning of a new trend, but rather reflected the continued impact of cold weather and increasing mortgage rates, factors that have been depressing residential property values for the past several months. U.S. home prices have posted smaller year-over-year gains in each of the past three months, and in the 12 months through December, prices gained just 13.4 percent. But economists do not see the slowdown as surprising or concerning.
“Prices are [still] rising, even though we should see those gains moderating,” Raymond James & Associates chief economist Scott Brown told Bloomberg, indicating that price gains will only continue to shrink in coming months. “You’re still talking about double-digit percentage increases,” he said, but those double-digit percentage increases “aren’t going to be sustainable over the long term.”