Home Prices Increase 5.5 Percent

Prices increased 5.5% nationally in December when compared with the previous year, the S&P CoreLogic Case-Shiller index showed today. That is up from the 5% annual increase recorded the prior month. On a monthly basis, prices fell 0.4%, according to the index.

The 10-city composite, which encompassed Los Angeles, Miami and New York, rose 7% annually, compared with an increase of 6.3% in November. The 20-city composite, which also tracked housing prices in Dallas and Seattle, posted an annual gain of 6.1%, which also marks an increase from the 5.4% figure recorded the previous month.

The Case-Shiller index reports with a two-month delay, meaning it may not capture the latest ongoings in the market.

The interest-rate-sensitive housing market entered a deep freeze last year in the wake of the Federal Reserve’s aggressive interest-rate hike campaign. However, prices have quickly recovered as buyers adjust to higher mortgage rates and compete for a limited supply of homes.

The problem is unlikely to be resolved anytime soon. With mortgage rates hovering near the highest level in two decades, sellers who locked in a low rate before the pandemic began have been reluctant to sell, leaving few options for eager would-be buyers.  Available home supply is still down a stunning 34.3% from the typical amount before the pandemic began in early 2020, despite a recent drop in mortgage rates, according to a separate report published by Realtor.com.