Home Price Appreciation Continued in January


In the first month of 2018, national home price appreciation continued, but at a slower pace than in December 2017. Meanwhile, more than half of the 20 metro areas had higher home price appreciation than the national level.

S&P Dow Jones Indices released the Home Price Index for the first month of 2018. The Case-Shiller U.S. National Home Price Index rose at a seasonally adjusted annual growth rate of 6.7% in January, down from the 8.2% increase in December. In the first month of 2018, home price appreciation continues with strong demand and tight inventory, however, it was the lowest one since August 2017.

However, the Home Price Index from the Federal Housing Finance Agency (FHFA) rose at a seasonally adjusted annual rate of 9.8% in January, following a 5.2% increase in December. Figure 2 below shows the annual growth rates for both the Home Price Index and the FHFA House Price Index over the past 27 years. As shown in the figure, the difference can diverge month-to-month over the past years, but in the longer-term trends the two series tend to track each other closely.

In addition to tracking home price changes nationwide, S&P also estimates home prices across the 20 metro areas. In January, the annual growth rates of the 20 metro areas ranged from 1.90% to 20.99%. Among the 20 metro areas, Seattle led the way with a 20.99% increase, followed by Atlanta with 18.40% and San Francisco with a 17.69% increase. Fifteen of the 20 metro areas exceeded the national average of 6.70% in January.

Moreover, the scatter plot below presents the 20 major U.S. metropolitan areas’ annual growth rates in January 2018 and in December 2017. The X-axis presents the annual growth rates in December 2017; the Y-axis presents the annual growth rates in January 2018. As shown in the Figure 3, fifteen of the 20 metro areas, the dots above the line, had an acceleration in home price growth while the national level and the rest 5 metro areas, located below the line, experienced the deceleration in home price growth.




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