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Despite hopes of market deceleration at the start of 2022, home prices are taking off yet again as a combination of low for-sale inventory and unwavering demand keep competition tight. The S&P Corelogic Case-Shiller National Home Price Index rose 18.8% year-over-year in December at a faster pace than in November in 15 of the 20 markets included in the 20-city index, Zillow reports.

An already low supply of homes for sale fell sharply in December, leaving buyers with a scarce selection in a picked-over market, but overall demand for home buying remains strong as the threat of rising mortgage rates looms large.

Homes that sold in December typically left the market about a month faster than those homes that sold in December 2019 did. This demand may be tested in the coming months as mortgage rates press firmly higher, but early indications are that competition for housing may have only intensified to begin the year, setting the market up for a red-hot spring shopping season.

Monthly growth in January as reported by Case-Shiller is expected to accelerate from December in the 20-city and national indices, and slow in the 10-city index. The pace of annual growth is expected to climb in all three indices. S&P Dow Jones Indices is expected to release data for the January S&P CoreLogic Case-Shiller Indices on Tuesday, March 29.

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