The S&P CoreLogic Case-Shiller 20-city home price index in the US rose by 4.5% year-over-year in December 2024, surpassing the 4.3% increase seen in November and coming in slightly above expectations of 4.4%.
US house prices rise by 4.5% in December
This marked a continuation of steady home price growth, though it indicated a cooling trend from the more rapid appreciation seen in recent years. New York led the pack with the highest annual gain among the 20 cities, reporting a 7.2% increase in home prices, followed closely by Chicago at 6.6% and Boston at 6.3%. These cities, known for their robust housing markets, showed continued demand despite broader economic uncertainties.
In contrast, Tampa posted the lowest return, falling 1.1%, reflecting weaker performance in some of the southern markets that had previously experienced rapid growth. The disparity in price trends highlights the regional differences that continue to shape the housing market, with certain areas, particularly in the Sun Belt, seeing price declines as demand slows after years of robust appreciation.
Expert comment
"National home prices have risen by 8.8% annually since 2020, led by markets in Florida, North Carolina, Southern California, and Arizona," said Brian D. Luke, CFA, Head of Commodities, Real & Digital Assets at S&P Dow Jones Indices. "While our National Index continues to trend above inflation, we are a few years removed from the peak home price appreciation of 18.9% observed in 2021, and are seeing below-trend growth relative to the history of the index." This reflects the broader moderation in the housing market after the pandemic-era boom, when prices surged amid low interest rates and a shift in housing preferences.
Home prices stalled during the second half of 2024
Luke also noted that "home prices stalled during the second half of the year, with markets in the West dropping the fastest," pointing to a slowdown in formerly hot markets like California and the Pacific Northwest. As affordability challenges continue to weigh on prospective buyers and as interest rates remain elevated, many markets are experiencing a shift from the frenetic pace of earlier years to a more normalized, albeit still positive, growth trajectory. Going forward, experts will be closely watching whether the trend of slowing price increases continues, or if certain regions will experience further cooling or stabilization in the coming months.
