U.S. home prices increased 0.3% in February compared with January and were up 2.9% compared with February 2024, according to the latest home price index report from Cotality (formerly CoreLogic).
Currently the firm is forecasting that home prices will increase 4.2% over the next 12 months.
Currently, the median national price for a home is $385,000.
The firm’s data show that home buying demand remains weak as households address economic and policy uncertainty, potential inflation pressures from tariffs, and concerns about job losses and personal financial situations.
Affordability is a concern, as the income needed to afford a median-priced home is now 22% higher than the average national wage.
“For the last two and a half years, prices have ebbed and flowed below the records set in June 2022, but in February, prices finally reached a new high point putting the national median home price at $385,000,” says Selma Hepp, chief economist for Cotality, in the report. “Despite recent increases in home prices breaking the trend of flat prices, February’s seasonal rise remained subdued compared to pre-pandemic levels, contributing to a decline in overall annual appreciation. This continued cooling reflects weak homebuying demand as households address economic and policy uncertainty; potential inflation pressures from tariffs; and concerns about job losses and personal financial situation.”
“Still, not every state has equal home price growth,” Hepp says. “The Northeast has spent months surpassing national average growth trends, but in February, West Virginia made an appearance as one of the top five states for price growth.”
“Tennessee and South Carolina are also seeing new price records, which could continue as more people move to southern states surrounding Florida,” Hepp says. “The states have a median home price of $335,000 and $332,000, respectively. As more baby boomers move into retirement, they are looking for affordable regions, and Appalachia has become an increasingly popular destination. The influx of well-heeled retirees has the potential to alter these markets that have been historically affordable.”
“Meanwhile, Hawaii and Washington D.C. are the only two states seeing negative home price growth. Despite the declines, both states have median home prices well above the national average,” she adds.
“Despite the general cooling in home prices, housing markets in the Northeast continue to experience stronger price gains due to greater income growth and an ongoing severe shortage of homes for sale,” she says. “In contrast, markets in the Southeast and West, which have seen more inventory growth and weakening demand, are experiencing more price discounts and lower home price gains. Additionally, condominium prices have slowed as condominium inventory, particularly in Florida, continues to increase quickly.”
Photo: Gustavo Zambelli