U.S. single-family home prices accelerated at a faster pace than expected in January supported by a low inventory of housing stock, a survey showed on Tuesday.
The S&P CoreLogic Case-Shiller composite index of 20 metropolitan areas rose 5.7 % in January on a year-over-year basis, from a downwardly revised 5.5 % increase in December. January's result topped the estimate of a 5.6 % increase from a Reuters poll of economists and was the biggest year-on-year increase since July 2014.
David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, said recent rate increases by the U.S. Federal Reserve are not lifting mortgage rates dramatically and so should not present a significant headwind to further price gains. The Fed raised rates a quarter percentage point at two of its last three meetings, most recently earlier in March.
If the pace of Fed increases accelerates, however, "rising mortgage rates could become a concern," he said.
On a monthly basis, prices in the 20 cities rose 0.9 % in January on a seasonally adjusted basis, the survey showed, outpacing expectations for a 0.7 % increase.
On a non-seasonally adjusted basis, prices increased 0.2 % from December.