US Housing Holds Steady: S&P Index Up, FHFA Reports Minor Dip in January 2024

S&P CoreLogic Case-Shiller Index Shows Resilience

The S&P CoreLogic Case-Shiller Index, a critical gauge for US home prices, evidenced a firm upward trend in January 2024. Significantly, three out of the twenty major metropolitan markets demonstrated month-over-month price increases. This continuation of growth is noteworthy as it indicates persistent strength in certain sectors of the housing market. The National Home Price NSA Index reflected a 6.0% annual gain in January, an uptick from the previous month’s 5.6%. The 10-City and 20-City Composites also posted increases, underscoring a nationwide trend. Notably, San Diego led with an 11.2% year-over-year gain, followed by Los Angeles at 8.6%. Even Portland, which ranked lowest, showed a positive trajectory with a 0.9% increase.

FHFA House Price Index: A Slight Dip

In contrast, the Federal Housing Finance Agency’s (FHFA) House Price Index reported a marginal decline of 0.1% in January from December. Despite this slight month-over-month dip, the annual perspective remains robust, with a 6.3% increase from the previous year. This decrease, the first since August 2022, aligns with a broader market recalibration. The regional breakdown reveals a mixed bag, with the South Atlantic division experiencing a 0.6% decrease and the West North Central division a 1.5% increase. The year-over-year data, however, uniformly showed positive growth across all nine census divisions, reinforcing the long-term strength of the housing market.

Market Forecast: Short-term Caution, Long-term Strength

The juxtaposition of the S&P CoreLogic Case-Shiller Index’s resilience and the FHFA House Price Index’s slight dip paints a picture of a housing market in a state of careful balance. In the short term, the market appears poised for cautious trading, reflecting a sensitivity to broader economic indicators, including interest rate trends and Federal Reserve policies. Investors are advised to maintain vigilance, considering the potential impact of these indices on the housing market’s trajectory. Despite the near-term uncertainty, the underlying strength of the housing market, as evidenced by the year-over-year growth, suggests a bullish outlook for the long term.