San Diego recorded the highest year-over-year house price jump of the 20 cities under observation by the S&P CoreLogic Case-Shiller National Home Price Index, as purchase prices continue to climb nationwide.
San Diego registered a more than 11 percent jump in home prices in January. The national index which covers the nine U.S. census divisions recorded a 6 percent increase in the month across the country compared to a year ago, the fastest annual jump in two years. Another California city that saw a significant spike in home prices was Los Angeles with an 8.6 percent jump.
"U.S. home prices continued their drive higher," Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices, said in a statement. "For the second consecutive month, all cities reported increases in annual prices, with San Diego surging 11.2%. On a seasonal adjusted basis, home prices have continued to break through previous all-time highs set last year."
San Diego's warm climate and availability of jobs is attractive for Americans who migrate to the area, pushing up housing demand that leads to a jump in prices, according to an analysis by moving company Qshark.
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The S&P CoreLogic Case-Shiller National Home Price Index is a result of a three-month moving average of home prices. Index levels are published with a two-month lag in part due to the reality that it can take up two months for a home transaction to be completed.
Elevated mortgage rates dampened demand in house prices from December, according to the S&P CoreLogic Case-Shiller Index. After declining from a peak of 8 percent in the fall, home loan costs ticked up over the last few weeks, discouraging buyers which may have helped contribute to a drop in prices over the month.
Recent data suggests that elevated mortgage rates depressed activity in the housing market. In February, new home sales plunged on the back of high borrowing costs, according to analysts.
This dynamic was reflected as well in the data from the S&P CoreLogic Case-Shiller Index as monthly, prices declined in some cities.
"On a monthly basis, home prices continue to struggle in the face of elevated borrowing costs. Seventeen markets dropped over the last month, while Minneapolis has posted a 2.4% decline over the prior three months," according to Luke.
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But San Diego and Los Angeles still remained expensive for homes. In January San Diego saw a nearly 2 percent increase from the prior month while Los Angeles ticked up by 0.1 percent. Washington also saw a jump of 0.5 percent monthly increase.
"Only Southern California and Washington D.C. have stood up the rising wave of interest rates and deliver positive returns to start the year," Luke said.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
