Home price growth accelerated in the first month of the year — reversing a decelerating pace in the past few months.

Standard & Poor’s said Tuesday that its S&P CoreLogic Case-Shiller national home price index posted a 19.2% annual gain in January, up from 18.9% in December. The annual growth rate remains elevated — the fourth highest reading in 35 years. The 20-City Composite posted a 19.1% annual gain, up from 18.6% a month earlier. The 20-City results surpassed analysts’ expectations of a 18.55% annual gain, according to Bloomberg consensus estimates.

“Home price changes in January 2022 continued the strength we had observed for much of the prior year,” said Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, in a statement. “Last fall we observed that home prices, although continuing to rise quite sharply, had begun to decelerate. Even that modest deceleration was on pause in January.”

Phoenix led the 20-City Composite for the 32nd consecutive month, while Tampa and Miami followed. Phoenix posted an annual gain of 32.6%. Tampa and Miami posted a 30.8% and 28.1% annual gain respectively.

“The strength in home prices continues to be very broadly based. All 20 cities saw price increases in January 2022, with prices in 16 cities accelerating relative to December’s report. January’s price increase ranked in the top quintile of historical experience for 19 cities, and in the top decile for 17 of them,” said Lazzara.

The results were somewhat expected since the index is a lagging indicator of home prices and more recent data points to an increase in prices. Last week, the National Association of Realtors reported that the median existing-home price for all housing types in February rose 15% to $357,300, up 15.0% from February 2021, as prices grew in each region — marking 120 consecutive months of year-over-year increases, the longest-running streak on record.

“After four months of slowing or flat growth, home price growth sped up in January,” said CoreLogic Deputy Chief Economist Selma Hepp in a statement. "While the re-acceleration of home price gains may be concerning, and likely discouraging for first-time and younger buyers, it is nevertheless unsurprising considering the dire inventory of for-sale homes, which continues to decline and continually record new lows."

The number of homes for sale remains at historic lows, which is one reason for high home prices. Total housing inventory at the end of February totaled 870,000 units, up 2.4% from January and down 15.5% from one year ago. Unsold inventory sits at a 1.7-month supply at the current sales pace, up from the record-low supply in January of 1.6 months and down from 2.0 months in February 2021.

“Today’s S&P Case Shiller Index points to a strong start to the 2022 housing market. Home prices continued rising — even in the middle of a snowy January— as buyers rushed to find a home in order to beat rising mortgage rates, which advanced 44 basis points during the month," said George Ratiu, senior economist and manager of economic research at Realtor.com, in a statement. "While buyers remain interested and willing to purchase homes, mortgage rates are already moving toward 5.0% and starting to cap their ability to qualify for a loan. The monthly payment for a median-priced home has jumped 30% in the past year, far outpacing even fast-rising consumer prices, up almost 8% from a year ago.

Raitu added, "These higher costs impacted sales of both new and existing homes in February. While the small number of homes-for-sale will keep upward pressure on prices as we move through the spring buying season, I expect conditions to undergo noticeable adjustments in the months ahead."

Economists expect rising interest rates to slow down home price growth in the coming months. Rates on the 30-year fixed mortgage (the most common home loan for buyers) topped 4% this month. At the same time, 40-year high inflation is expected to put pressure on consumers' wallets and overall sentiment.

“The macroeconomic environment is evolving rapidly," said Lazzara. "Declining COVID cases and a resumption of general economic activity has stoked inflation, and the Federal Reserve has begun to increase interest rates in response. We may soon begin to see the impact of increasing mortgage rates on home prices."

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Amanda Fung is an editor at Yahoo Finance. Follow her on Twitter: @amandafung

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