San Diego County's home market continued to show signs of decelerated growth in January, falling behind the national average for the second month in a row, said the S&P CoreLogic Case-Shiller Indices released Tuesday.
The indices, adjusted for seasonal swings, showed San Diego County home prices rose 5.7% in a year. It was 5.9 percent nationwide, the strongest increase in 31 months.
Of the 20 major regions followed by the indices, San Diego ranked No.14 in January — above Los Angeles, Phoenix, Cleveland and other markets.
Last year at this time, San Diego's home prices were increasing nearly 7% in a year and outpacing the national average.
While mortgage rate increases could slow price growth eventually, it hasn't made an impact yet, wrote David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices.
"Higher prices and mortgage rates shrink the number of households that can afford to buy at current price levels," he wrote. "At some point, this process will force prices to level off and decline — however, we don't appear to be there yet."
Seattle had the biggest yearly increase at 11.3%, followed by Portland at 9.7% and Denver at 9.2%.
The lowest were Washington, D.C., at 3.9% and New York at 3.2%.
The coming year appears to follow a similar pattern as 2016 of low home inventory driving up prices, said Zillow Chief Economist Svenja Gudell. The difference this year is mortgage rates are up since Donald Trump's election victory and could continue to go up following the Federal Reserve's decision to raise rates.
"(Mortgage) rates are rising slowly and what inventory is available continues to fly off the shelves," she wrote in an email. "Nobody should expect these overall market forces to shift meaningfully overnight."
The median home price in San Diego County was $495,000 in January, CoreLogic said. The Case-Shiller index goes beyond evaluating home transaction prices to track repeat sales of identical single-family houses as they turn over through the years.
