Home Prices Keep Going Up Every Year Despite a Dip in January
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Home Prices Keep Going Up Every Year Despite a Dip in January

The yearly pace of how much home prices are going up rose to 6% from 5.6% last month in a big part of the country. San Diego saw the biggest yearly increase at 11.2%, followed by Los Angeles at 8.6%. But Portland, Oregon, had the smallest increase among 20 cities, with only a 0.9% rise.

But in January, prices across the country went down by just a little bit, 0.1%, compared to December.

“Home prices in the U.S. are still going up,” said Brian D. Luke, who knows a lot about real estate. “People who own homes probably saw their home values go up a lot in the last year, no matter where they live.” Lisa Sturtevant, who studies the housing market, said prices going up so much is making it hard for many people to buy homes.

“A lot of people are finding it hard to buy homes because prices keep going up,” she said. “There just aren’t enough homes for sale to meet how many people want to buy.” This is the second set of data about housing we’ve gotten this week. On Monday, we found out that new home sales went down a little bit in February, to about 662,000 per year. That’s a bit lower than what experts thought, but it’s still higher than last year.

The housing market is dealing with two big problems: interest rates on loans are going up, though not as much as before, and there aren’t enough homes for sale because a lot of people don’t want to sell their homes when interest rates are still low. “Even though more homes are being put up for sale, there are still almost 40% fewer homes for sale than before the pandemic,” said Hannah Jones, who studies the housing market for Realtor.com.

Housing prices have been making the cost of living go up a lot in the past few years, but one issue is that the way the government figures out how much housing costs takes a long time to catch up. So even if prices start going up slower, it could take months for the official numbers to show it. The head of the Federal Reserve, Jerome Powell, said last week that he thinks housing prices will start going up slower soon.

But even with some problems, home prices and the value of other things like stocks are still going up, which shows that the economy in the U.S. is doing well and making a lot of people richer. “Since the pandemic started, the value of stocks and homes has gone up a lot,” said Mark Zandi, who knows a lot about the economy. “Even though not everyone is making more money, it’s still a big deal and a big part of why the economy is doing well.”

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