In January, U.S. home prices increased by 3.3% year-over-year but showed minimal month-over-month growth, indicating a potential slowdown in price increases. The median price for single-family homes reached $375,000, while regional disparities emerged, with the Northeast exhibiting resilience despite challenges like high interest rates. Conversely, the Sunbelt, particularly Florida and Arizona, appears vulnerable to declines. Chief Economist Selma Hepp emphasized the impact of consumer sentiment on demand, noting that uncertainty around the economy and inflation could be dampening future home-buying activity.
Flattening home price changes over the last six months suggest further price deceleration is ahead. More importantly, compressed monthly changes highlight the general lack of homebuying demand.
The Northeast has proven the most resilient in the face of slowing job growth, high interest rates and affordability issues. Meanwhile, most of the 10 coolest markets were in the Sunbelt.
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