U.S. home price growth decreased 0.2% in November compared with December and was up 0.7% compared with November 2024, according to First American’s latest Home Price Index report.
The report finds that home price growth nationally has stabilized in a low single-digit range, helping affordability improve, but with stark differences region to region and market to market.
“House price growth has stabilized in the low single digits as the market adjusts to a new normal for mortgage rates and a constrained affordability environment,” says Mark Fleming, chief economist at First American, in the report. “The new housing market normal is characterized by minimal price appreciation and, in some regions, outright decline. Slower price growth offers buyers a bit of affordability breathing room in near term, and with wage growth exceeding house price growth, affordability is poised to continue slowly improving.”
The report shows that, in particular, there is a growing divide in appreciation levels between Rust Belt and Sun Belt markets.
“When it comes to house price appreciation, where the home is matters, as local market performance varies widely,” Fleming says. “Among the top 30 markets we track, markets with annual price declines outnumber markets with annual price growth. Notably, there is a growing divide in price appreciation between markets in the Rust Belt and Sun Belt. In markets where potential first-time buyers can still find relatively affordable homes – including parts of the Midwest and Northeast, such as Pittsburgh and St. Louis – price resilience is more evident. But, in markets where affordability has been stretched, such as Miami and Denver, higher inventory combined with strained household budgets has contributed to falling prices.”
Photo: Blake Wheeler