US home prices in January increased at the slowest pace since December 2019, as the Federal Reserve's monetary policy tightening continued to push interest rates higher.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index rose 3.8% on an annual basis in January. The index's previous slowest year-over-year uptick was a 3.7% increase in December 2019.

While home prices logged an annual gain, the US National Home Price Index declined 0.2% month over month after seasonal adjustment, marking the seventh consecutive month of decline.

"The Federal Reserve remains focused on its inflation-reduction targets, which suggest that rates may remain elevated in the near term," S&P Dow Jones Indices Managing Director Craig Lazzara said.

Home prices edge lower in top cities

The deceleration in housing prices was evident in the cities covered in both the 20-City Composite and 10-City Composite indexes. Both indexes posted a month-over-month decline of 0.4% in January after seasonal adjustment.

However, on a year-over-year basis, both the 20-City and 10-City indexes increased 2.5%.

– Set email alerts for future Data Dispatch articles. – Read some of the day's top real estate news and insights from S&P Global Market Intelligence.

The 13.8% year-over-year growth in housing prices in Miami was the highest among the 20 cities in the index during January. Miami was followed by in-state peer Tampa, where home prices rose 10.5% year over year. Atlanta was in third place, with housing prices in the city climbing 8.4% in January from a year earlier.

Most homebuilder stocks turn positive

The majority of US homebuilder stocks saw a positive one-year total return as of March 27, with the industry median at 16.7%, according to S&P Global Market Intelligence data.

Meritage Homes Corp. was the best-performing homebuilder stock, with the company's one-year total return reaching 37.4%. The homebuilder sold 14,106 homes in 2022, marking a year-over-year increase of 10.2%.

Taylor Morrison Home Corp., which has been the best-performing stock among its peers in recent times, slipped to the fourth spot with a 28.4% gain in one-year total return.

Lennar Corp. led the way as the homebuilder that sold the most homes among the top five companies in the last 12 months. Lennar sold 67,308 homes as of Feb. 28, up 12.3% from the year-ago period.

Mortgage lending decline continues

In 2022, residential mortgages originated in the US plummeted 37.1% year over year to $3.071 trillion.

Rocket Mortgage LLC was the top mortgage lender in the group with $124.06 billion in mortgages originated during the year. However, the lender's mortgage originations were down 62.1% from the previous year.

First Republic Bank was the only big lender to record year-over-year growth in residential mortgage originations, as the bank's originations jumped 10.7% to $30.70 billion.

Freedom Mortgage Corp. had the steepest year-over-year decline in mortgage originations. The company's originations stood at $20.88 billion, down 75.8% from a year earlier.

In February, new single-family home sales grew 1.1% month over month to a seasonally adjusted annual rate of 640,000 units but were down 19% year over year, according to data from the US Census Bureau and the US Department of Housing and Urban Development.

The South and West were the only regions to experience a monthly increase in sales of new single-family homes. New home sales plummeted in the Northeast.

The housing inventory continues to remain at historic lows. However, there are multiple offers that are coming in for properties, National Association of Realtors Chief Economist Lawrence Yun said in a March 21 research note.

"We're seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs," Yun said.

Existing home sales rose 14.5% to 4,580,000 units in February compared to the previous month but were 22.6% lower from a year earlier, according to the National Association of Realtors.