Friday, October 27, 2023

S&P Case-Shiller: Domestic Costs Drop in January, Some Cities See Decrease

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Domestic Costs Decrease in January, with Some Cities Seeing a Drop, According to S&P Case-Shiller

The latest report from S&P Case-Shiller reveals that domestic costs have cooled down in January, with some cities even experiencing a decline. This news is a welcome relief for homeowners who have been grappling with high housing costs for years.

The S&P CoreLogic Case-Shiller U.S. National Home Price Index, which measures the value of residential real estate in 20 major metropolitan areas across the country, showed a 3.2% annual gain in January, down from 3.6% in December. The index also showed a 0.2% decrease in home prices from December to January.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, said that the slowdown in home price growth is a positive development for the housing market.

“Home price gains continue to slow,” Blitzer said. “The patterns seen in the last year or more continue: year-over-year price gains in most cities are consistently shrinking. Double-digit annual gains have vanished.”

Blitzer added that the decline in home prices is not a cause for concern, as it is a natural correction after years of rapid growth.

“The housing market is stabilizing, but at a slower pace than in recent years,” he said. “The pace of home price gains is still outstripping inflation, but the gap is closing. With mortgage rates and home prices both edging lower, affordability is improving slowly.”

The report also showed that some cities saw a decline in home prices in January. San Francisco saw a 1.3% decrease, while Seattle saw a 0.6% decrease. Other cities, such as Las Vegas and Phoenix, saw increases of 9.7% and 6.7%, respectively.

The slowdown in home price growth is likely due to a combination of factors, including rising mortgage rates, a slowdown in the economy, and a decrease in demand from buyers. However, experts believe that the housing market will continue to be strong in the long-term.

“Despite the recent slowdown, the housing market remains strong,” said Lawrence Yun, Chief Economist at the National Association of Realtors. “Low unemployment, solid job growth, and low mortgage rates are all positive indicators for the housing market.”

Yun added that the recent decline in home prices is not a cause for concern, as it is part of a natural cycle in the housing market.

“Home prices go up and down over time,” he said. “It’s important to remember that the long-term trend is upward. Homeownership remains a sound investment for most Americans.”

Overall, the latest report from S&P Case-Shiller shows that the housing market is cooling down, which is good news for homeowners who have been struggling with high housing costs. While some cities saw a decline in home prices in January, experts believe that the housing market will remain strong in the long-term.

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