Home-price growth grew in January while the supply of total homes for sale fell to a new low, according to The Wall Street Journal (subscription).
Case-Shiller Index: The S&P Case-Shiller National Home Price Index rose 19.2% in the year that ended in January, compared with an annual gain of 18.9% the prior month. The index measures average home prices in major American cities.
Home prices continue to rise: In 2021, home prices rose at a record pace, and so far in 2022, prices have continued to climb. The rising home prices are a result of a strong demand for homes that is outpacing the limited supply of homes for sale. Increased competition among homebuyers has led to bidding wars and many homes selling significantly above asking price.
Shrinking inventory: The number of homes for sale at the end of January was at the lowest level since home inventory began being tracked in 1999.
Rising mortgage rates: According to real estate agents, buyers rushed to make home purchases in January as mortgage rates began to increase. Mortgage rates have continued climbing since then and hit their highest level since 2019 this month. The average 30-year fixed mortgage rate rose above 4.4% last week, more than a percentage point higher than at the start of 2022.
Median home prices rise: The median existing home price rose to $357,000 in February, 15% higher than a year earlier. The rising prices combined with increased mortgage rates have made homeownership unaffordable for many Americans.