U.S. home prices were basically flat in December compared with November but up 3.4% compared with December 2023, according to CoreLogic’s home price index.
The annual increase is down substantially from December 2023, when the index registered 5.6% increase compared with December 2022.
Home price appreciation has been almost flat since the typically busy fall selling season began in September, the firm says.
Although housing supply improved throughout most of 2024, conditions trended down in December, and the country still needs more inventory for supply to catch up with buyer demand.
The tariffs that the Trump administration is threatening to enact are expected to increase building costs for both new homes and rebuilding those damaged by January’s incredibly destructive wildfires in Los Angeles County, costs that will delay home construction times and inevitably get passed on to the buyer or owner.
However, as of Feb. 3, the tariffs on Mexico and Canada have been delayed for at least a month.
“Home prices have remained flat since the housing market began seeing slower activity this past summer,” says Selma Hepp, chief economist for CoreLogic, in a statement. “Bifurcation across markets has also persisted. Northeastern markets drove appreciation growth due to low inventories of homes for sale while Southern markets readjusted to higher inventories and increases in variable mortgage costs, such as taxes and insurance.”
“Home prices are also cooling in the markets in Mountain West, which have been trying to find stability over the last year following the surge in mortgage rates and price declines from pandemic highs,” Hepp adds. “Despite the difficult housing markets conditions in 2024, home prices increased about 3.4 percent over the course of the year, a small jump compared to the 4.1 percent uptick in 2023. Going forward, with inventories slowly improving and mortgage rates remaining elevated, forecasts suggest a smaller overall increase in prices in 2025.”
Among the major cities, Chicago posted the highest year-over-year home price increase at 5.6%. Las Vegas saw the next-highest gain at 5%.
Among states, Connecticut ranked first for annual appreciation at 7.8%, followed by New Jersey at 7.7% and New Hampshire at 7.3%.
One state and one district recorded year-over-year home price losses.
Currently, CoreLogic is forecasting that home prices will rise by 4.1% annually by December 2025.
Photo: Phil Hearing