January home prices up 10% in biggest annual gain in 7 years
CoreLogic Home Price Index increased 10% year-over-year in January
If January is any indication, the housing market isn’t showing any signs of slowing down.
CoreLogic Home Price Index, which tracks national home prices monthly, showed prices were 10 percent higher in January than a year ago. It’s the first time since November 2013 that the index has reported double-digit annual growth.
The index is seen as an early indicator of home pricing trends.
No states had an annual decline in prices. The largest price growth was in Idaho, 21 percent; Montana, 17.4 percent; Indiana, 15.3 percent; and Maine, 15.3 percent.
Month-over-month, January’s gains were less impressive, with a 0.9 percent increase compared to December.
The price growth comes as housing inventory is at historically low levels and prices are rising as demand continues to be strong.
But CoreLogic warns that persistent demand could decline in coming months. A February survey of Americans who do not own homes found that 76 percent have no plans to buy in the next six months. Still, most economists expect demand to continue and, citing the lack of homes on the market, say prices will continue to climb.
Fitch Ratings, however, noted that the shortage of available homes is artificially inflating the value of homes. The rating agency estimates that U.S. home prices are more than 5 percent higher than economic conditions justify.