Impact of COVID-19 on housing prices is not reflected in January's data
US home prices were growing at a modest rate in January, weeks before the widespread community transmission of the coronavirus in the US.
Nationwide, home prices increased 3.9% year over year in January, according to the S&P CoreLogic Case-Schiller US National Home Price NSA Index. Home prices also jumped month over month, up 3.7% from December.
The 10-City Composite climbed to 2.6% year over year and up from 2.3% month over month. Meanwhile, prices in the 20 cities surveyed by the index rose 3.1% year over year, and up from 2.8% month over month.
"The trend of stable growth established in 2019 continued into the first month of the new year," said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices. "Results for the month were broad-based, with gains in every city in our 20-City Composite; 14 of the 20 cities saw accelerating prices. As has been the case since mid-2019, after a long period of decelerating price increases, the National, 10-City, and 20-City Composites all rose at a faster rate in January than they had done in December.
Regionally, housing prices were strong in the West and South, and comparatively weak in the Midwest and Northeast. Fourteen of the 20 cities saw higher price increases in January than in December. Among these 20 cities, the three metros that posted the highest annual gains were Phoenix (6.9%), Seattle (5.1%), and Tampa (5.1%).
"It is important to bear in mind that today's report covers real estate transactions closed during the month of January," Lazzara said. "The COVID-19 pandemic did not begin to take hold in the US until late February, and thus whatever impact it will have on housing prices is not reflected in today's data."
A Redfin study found that 32% of home buyers and sellers expect home prices to rise when the next recession hits due to the financial impact of COVID-19.
