Spring Homebuying Season Will Likely Be Hot

Year-over-year home price gains in January 2018, per the U.S. National Case Shiller Index, presages a hot spring for homebuying. Zillow economist Aaron Terrazas says that the traditional seasonal home shopping boundaries are becoming more ambiguous.

Currently, the housing market's tight supply, strong competition, and rising home prices and interest rates "can barely absorb what current demand there is. It remains to be seen how it adapts to even more buyers, and presumably less inventory, in the months to come," says Terrazas. Furthermore, while the share of new homes for sale just hit the 300,000 threshold for the first time since 2009, the price of the homes is higher due to the rising costs of land, materials, and labor, per Zillow.

The continuing inventory pinch helped boost the U.S. national Case Shiller index 6.2 percent in January from a year earlier, down from a 6.3 percent gain in December. Case-Shiller’s 10-City Composite rose 6 percent, while the 20-City Composite climbed 6.4 percent year-over-year. Twelve of the 20 cities reported greater price increases in the year ending January 2018 versus the year ending December 2017. Home prices in Seattle, Las Vegas, and San Francisco posted the highest annual gains among the 20 cities...

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