WASHINGTON – Single-family home values across America showed modest growth during January, though escalating mortgage rates tied to ongoing Middle East conflicts may push potential first-time homebuyers out of the market, according to new federal data.
The Federal Housing Finance Agency reported Tuesday that home values climbed 0.1% in January, following a revised 0.3% increase in December. December’s figure was initially reported as a smaller 0.1% gain. Over the full year ending in January, home prices grew 1.6%, down from December’s 1.9% annual increase. This deceleration in yearly price growth partially stems from higher prices from the previous year falling out of the comparison calculations.
Home affordability had been showing signs of improvement before the conflict involving the U.S. and Israel with Iran drove up oil costs and sparked concerns about inflation, leading to higher U.S. Treasury bond yields. Since mortgage rates follow the benchmark 10-year Treasury note, the popular 30-year fixed-rate mortgage has surged to a six-month peak of 6.38%, up from 5.98% just before the conflict began.
Regional variations showed significant differences across the country. The East South Central area experienced the largest monthly price jump at 1.7%. The Mountain, West North Central, New England and Middle Atlantic regions also posted gains. However, the West South Central region saw prices drop 0.7%, while the South Atlantic region declined 0.4% and the East North Central area fell 0.1%.
Looking at annual comparisons, the East North Central region led with a 4.4% price increase, followed closely by the Middle Atlantic region at 4.3%. The East South Central, New England and West North Central areas also recorded strong yearly gains. Meanwhile, the Pacific and West South Central regions experienced price declines, and the South Atlantic region remained flat year-over-year.
