WASHINGTON (Reuters) - U.S. single-family home prices increased in February after seven straight monthly declines likely as a dip in mortgage rates at the start of the year fueled demand, but the overall trend continued to point to a slowdown in house price inflation.
The S&P CoreLogic Case-Shiller national home price index, covering all nine U.S. census divisions, rose 0.2% in February after adjusting for seasonal fluctuations. That followed a 0.2% fall in January. New and existing home sales rose in February.
On a year-on-year basis, the national home price index rose by a seasonally unadjusted 2.0% in February, marking the 10th straight month of decelerating annual home price gains. That followed a 3.7% increase in January. The small gain also reflected last year's large increases falling out of the calculation.
According to CoreLogic Chief Economist Selma Hepp, February's data suggested that "home prices nationally have bottomed out." The housing market has suffered the most from the Federal Reserve's fastest interest rate hiking campaign since the 1980s to tame inflation.
Residential investment has contracted for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.
But supply remains tight, which could limit any decline in house prices. According to the National Association of Realtors, there were less than one million homes on the market compared to 1.7 million prior to the COVID-19 pandemic.
As a result, multiple offers persisted in some regions, especially for entry-level homes, the NAR said.
Strong gains in annual house price growth in February were recorded in the Southeast, which reported a 7.8% increase. Miami led the pack and there were also notable gains in Tampa, Atlanta and Charlotte. But house prices fell 4.2% in the West, reflecting declines in San Francisco, Seattle, San Diego, Portland, Las Vegas, Phoenix, Los Angeles and Denver.
"The housing markets continue to vary across markets and price tiers, but lower mortgage rates and low inventories have been helpful in providing the floor for prices where prices seemed to have nosedived following the mortgage rate surge," said CoreLogic's Hepp.
A separate report from the Federal Housing Finance Agency on Tuesday also showed monthly house prices firming up in February, accelerating 0.5% after climbing 0.1% in January. In the 12 months through February prices increased 4.0% after rising 5.3% in January.