U.S. Home-Price Growth Accelerated Before Pandemic

Daniel Acker/Bloomberg

Home-price growth accelerated in January, the latest indication that the U.S. housing market was poised for a strong year of sales before the coronavirus pandemic struck.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 3.9% in the year that ended in January, up from a 3.7% annual rate the prior month.

Economists and real-estate executives had expected robust home sales this year due to a strong job market and low mortgage rates. U.S. existing-home sales rose to a 13-year high in February, according to the National Association of Realtors.

But with the pandemic now keeping potential buyers and sellers on the sidelines, experts expect the pace of home sales to sharply decelerate. Capital Economics forecast in March that home sales would drop 35% in the second quarter of 2020 compared with the fourth quarter of 2019.

The Case-Shiller 10-city index gained 2.6% over the year ended in January, up from a 2.3% annual change in December. The 20-city index gained 3.1%, after an annual gain of 2.8% in December. Prices rose in all 20 cities.

Economists surveyed by The Wall Street Journal expected the 20-city index to gain 3.2%.

Phoenix had the fastest home-price growth in the country, at 6.9%. Seattle, Tampa and Seattle all posted the second-fastest price growth, at 5.1% each.

A separate measure of home price growth by the Federal Housing Finance Agency released last week found a 5.2% increase in home prices in January from a year earlier.

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