US home prices soared in January by most in seven years, says report

US home prices increased at the fastest pace in seven years in January as the pandemic has fueled demand for single-family houses even as the supply for such homes shrinks.

The S&P CoreLogic Case-Shiller 20-city home price index, released Tuesday, rose 11.1 per cent in January from a year earlier.

That's the biggest gain since March 2014. Prices rose in all 20 cities, and the 12-month increase was larger for all cities in January than in the previous month.

January's data remain consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes, said Craig Lazzara, Managing Director and Global Head of Index Investment Strategy at S&P DJI.

It's not yet clear whether that trend will fade as the pandemic is brought under control, Lazzara said, or if there will be a permanent shift higher in demand.

The biggest price gain was in Phoenix, where home prices jumped 15.8 per cent, followed by Seattle, with a 14.3 per cent gain, and San Diego, at 14.2 per cent.