PhotoHome prices across the country rose over the last 12 months.

On a year-over-year basis, the S&P/Case-Shiller U.S. National Home Price Index (HPI), covering all nine U.S. census divisions, was up 5.4% in January.

The 10-City Composite rose 5.1% for the year., while the 20-City Composite’s year-over-year gain was 5.7%. After seasonal adjustment, the National, 10-City Composite, and 20-City Composite rose 0.5%, 0.8%, and 0.7%, respectively, from the prior month.

West leads the year-over-year advance

Portland, Seattle, and San Francisco reported the highest year-over-year gains among the 20 cities, with another month of double digit annual price increases. Portland was on top with an 11.8% year-over-year price increase, followed by Seattle with 10.7%, and San Francisco with a 10.5% increase.

Eleven cities enjoyed greater price increases in the year ending January 2016 versus the year ending December 2015. Phoenix posted an annual gain of 6.1% in January 2016 versus 6.3% in December 2015, ending its streak of 12 consecutive months of increasing annual gains. The western part of the country saw the largest price gains in the past year; the northeast is the weakest region.


Before seasonal adjustment, the National Index, the 10-City Composite, and the 20-City Composite all were unchanged in January. After seasonal adjustment, all three composites reported strong advances.

Eleven of 20 cities reported increases in January before seasonal adjustment; after seasonal adjustment, all 20 cities increased for the month.

Inventory worries

“Home prices continue to climb at more than twice the rate of inflation,” said David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices. “The low inventory of homes for sale -- currently about a five month supply -- means that would-be sellers seeking to trade-up are having a hard time finding a new, larger home.

The recovery of the sale and construction of new homes has lagged the gains seen in existing home sales, but this may be starting to change. Starts of single family homes in February were the highest since November 2007, and the single-family-home share of total housing starts was 70% in February, up from a low of 57% in June 2015.

“While low inventories and short supply are boosting prices,” Blitzer said, “financing continues to be a concern for some potential purchasers, particularly young adults and first time home buyers. The issue is availability of credit for people with substantial student or credit card debt.”

Blitzer said one hopeful sign is that the home ownership rate -- at 63.7% in the 2015 fourth quarter -- may be turning around. It is up slightly from 63.5% in the 2015 second quarter but far below the 2004 high of 69.1%.”

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