U.S. home prices increased 0.6% on a seasonally adjusted basis in January compared with December and were up 4.1% compared with January 2024, according to the latest Case-Shiller home price index report.
The index’s 20-city and 10-city composites – measuring home prices in the 20 largest U.S. cities – each posted a month-over-month increase of 0.5%.
Year-over-year, the 10-city composite saw an annual increase of 5.3%, up from a 5.2% annual increase in the previous month, while the 20-city composite posted a year-over-year increase of 4.7%, up from a 4.5% increase in the previous month.
New York again reported the highest annual gain among the 20 cities with a 7.7% increase in January, followed by Chicago and Boston with annual increases of 7.5% and 6.6%, respectively. Tampa posted the lowest return, falling 1.5%.
“Home price growth continued to moderate in January, reflecting a clear two-part story across the past year,” says Nicholas Godec, CFA, CAIA, CIPM, head of fixed income tradables and commodities at S&P Dow Jones Indices, in a statement. “The National Composite Index posted a 4.1 percent annual gain, with the bulk of appreciation—4.8 percent—occurring in the first half of the year. Prices declined 0.7 percent in the second half, as high mortgage rates and affordability constraints weighed on buyer demand and market activity.”
“Among the 20 metro areas tracked by the Composite 20, New York City led annual gains with a 7.7 percent rise, followed closely by Chicago at 7.5 percent and Boston at 6.5 percent,” Godec says. “Tampa was the only market to post a year-over-year decline, falling 1.5 percent. However, the second half of the year told a different story: San Francisco posted the largest six-month decline at 3.4 percent, followed by Tampa at 3.2 percent. Only four of the 20 cities managed to eke out price increases during this period—New York, Chicago, Phoenix, and Boston—highlighting broad-based cooling.”
“Rising mortgage rates throughout the year elevated monthly payment burdens, which, combined with already high home prices, pushed affordability to multi-decade lows in many regions,” Godec adds. “This likely contributed to subdued activity in the back half of the year, with both buyers and sellers exercising caution. Inventory constraints also remain a challenge, particularly in legacy metro areas, where limited new construction continues to restrict supply.”
“The strength in markets like New York and Chicago may reflect more normalized valuations relative to frothier regions, along with continued urban recovery trends post-pandemic,” he says. “On the other hand, Sunbelt markets that experienced sharp run-ups earlier in the cycle—like Tampa and Phoenix—have seen the most pronounced slowdowns.”
“Despite near-term softness, the S&P CoreLogic Case-Shiller Index remains historically elevated, and long-term homeowners have continued to build equity,” Godec concludes. “The current cycle reinforces the value of real estate as a long-duration asset, but also highlights how sensitive home prices are to changes in financing conditions and buyer affordability.”
Separately, the Federal Housing Finance Agency’s (FHFA) seasonally adjusted monthly home price index report shows that U.S. home prices increased 0.2% in January compared with December.
Year-over-year, home prices were up 4.8% compared with January 2024, according to the FHFA’s report, which uses a different methodology.
The previously reported 0.4% price growth in December was revised upward by the FHFA to 0.5%.
For the nine census divisions, seasonally adjusted monthly home price changes ranged from -0.8% in the South Atlantic division to +1.0% in the West North Central division.
The 12-month changes were all positive, ranging from +2.4% in the West South Central division to +8.2% in the Middle Atlantic division, the FHFA says.
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