Home-price growth continued to slow in January, providing critical relief to buyers heading into the critical spring selling season.
The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 4.3% in the year ending in January, down from 4.6% the prior month.
Slower price growth, along with lower mortgage rates and a growing inventory of homes for sale, are all potentially good news for home buyers this spring. Nonetheless, prices in most places are continuing to rise, meaning affordability remains a challenge for many first-time buyers.
The Case-Shiller 10-city index gained 3.2% over the year ending in January, down from a 3.7% annual change in December. The 20-city index gained 3.6%, after an annual gain of 4.1% in December.
Economists surveyed by The Wall Street Journal expected the 20-city index to gain 3.9%.
Once-hot housing markets on the West Coast, such as Seattle and San Francisco, have slowed sharply in recent months. Instead the new drivers of the American housing market are primarily places in the south that are trying to make up significant ground lost during the bust.
Las Vegas had the fastest home-price growth in the country for the eighth straight month, at 10.5%. Phoenix had the second-fastest price growth at 7.5%, followed by Minneapolis at 5.1%.
The housing market slowed sharply in the fall, when mortgage rates neared 5% and home prices were growing by more than 5%—both making it more difficult for buyers to afford homes.
The average rate for a 30-year mortgage fell to 4.28% last week, according to Freddie Mac. That has helped boost existing home sales, which jumped 11.8% in February compared with a month earlier, according to the National Association of Realtors.