Data: December Annual Price Growth Reverses Course, Up 3.9% YOY

This December both sellers and buyers took a step back as 2024 ended in a cooler fashion that is comparable to December 2023, according to CoreLogic. The end of 2024 saw the share of de-listings increase to a level not seen since after the Great Financial Crisis, and the time homes spent on the market rose sharply, hitting the highest level since the onset of the pandemic.

Although many housing market indicators are generally tracking pre-pandemic trends, there is a lot of trepidation and anticipation about the spring homebuying season.

So far, early housing market indicators for 2025 suggest that the spring homebuying season may look very similar to 2024. Although the availability of more for-sale homes is a positive sign, buyers are increasingly cautious amid economic apprehension, policy uncertainty, and elevated mortgage rates.

December marked the second month that annual appreciation figures climbed. While the housing market is typically slow during this season with flat prices, the CoreLogic S&P Case-Shiller Index ticked back up to 3.9%, rising above November’s annual 3.7% gain.

Despite the year-end uptick, the year-over-year slowdown is expected to continue through 2025. This is partially due to the comparison with strong spring 2024 price gains when annual price gains peaked at 6.5% in both February and March. In addition, a monthly view of home prices shows declines for five consecutive months.

The latest CoreLogic Home Price Index report forecasts home price gains slowing to 1.3% by April before picking back up. Overall appreciation for 2025 is also expected to remain lower than in 2024, averaging about 2.8% nationally.

Home prices moved lower in the second half of the year as high mortgage rates and buyer fatigue slowed homebuying demand. Compared to summer 2024, prices are down 0.8% cumulatively.

The non-seasonally adjusted, month-over-month index recorded a 0.15% decline in December, marking the fifth consecutive monthly decline since August. The monthly change is below the average 0.03% increase recorded between 2015 and 2019 and similar to the 0.16% monthly decline recorded in November 2023.

The 10-city and 20-city composite indexes also picked up slightly in December, with annual growth at 5.1% and 4.5%, respectively. This is down from the March 2024 peak when the 10-city composite index recorded 8.3% growth and the 20-city composite recorded 7.5% growth. Similarly to national index, the city composites haven’t changed notably from their October levels.

Compared with the 2006 peak, the national index is 75% higher, the 10-city composite index is 55% higher, and the 20-city composite 61% higher. Adjusted for inflation, the 10-city index is now 4% higher than its 2006 level, while the 20-city index is up by 8% when compared with its 2006 high point. When adjusted for inflation, national home prices are 18% higher compared with 2006. Inflation-adjusted prices haven’t shown the same level of appreciation as nominal prices given elevated inflation in recent years. Recent CoreLogic analysis of U.S. metros also showed the geographically unequal impacts of inflation.

“December marked the second month that slowing annual appreciation reversed, with prices up 3.9% year-over-year, from 3.6% in October,” said CoreLogic Chief Economist Dr. Selma Hepp. “While annual changes in home prices reflect comparisons with weak December 2023 prices and record a slight annual gain, the year 2024 ended on a notably cooler note for the housing market, with both sellers and buyers taking a step back. The share of de-listings increased to the level not seen since post-Great Financial Crisis while time on the market rose sharply to the highest level since the onset of the pandemic. The weakness continues to characterize markets in the Southeast — particularly Tampa — but Midwest markets like Cleveland and Detroit cooled from early-year advantages. Early housing market indicators for 2025 suggest that the spring homebuying season may look very similar to 2024. While greater availability of homes for sale is helpful, buyers are increasingly more cautious amid economic and policy uncertainties as well as elevated mortgage rates.”

In December, eight of the 20 metros saw slowing price growth year-over-year compared with the previous month. Tampa continued to post the largest cooldown in annual gains compared with the month before, followed by Atlanta and Los Angeles. In contrast, 12 metros saw annual gains accelerate from the month before, led by Boston, San Diego, and Portland, Oregon.

New York, Chicago, and Boston led the 20-city index annual gains, with respective increases of 7.2%, 6.6%, and 6.3%. Nine metros saw annual price gains higher than the national 3.9% increase. Denver, Dallas, and Tampa, Florida remained the slowest-appreciating markets in the 20-city index, with only Tampa recording an annual decline of 1.1%.

Over the course of 2024, nationwide home prices averaged 5.1% higher than in 2023. The top markets with highest average increase included New York (up 8.6%), San Diego (up 7.7%), and Chicago (up 7.4%). Seattle and Las Vegas, while showing smaller average gains in 2024, showed the largest rebounds since 2023, with Seattle up 11 percent points and Las Vegas up 10 percent points.

Six metros led by Boston, Miami, and Chicago posted monthly increases, and the three metros also saw notably stronger price gains than their pre-pandemic averages in December.

In contrast, month-over-month home price declines were led by markets in the Midwest and the South, with Tampa, Cleveland, and Detroit leading the pack. While the Midwest saw similar level of declines in December pre-pandemic, Tampa’s 1% decline is higher than 0.5% increase recorded pre-pandemic.

The month-over-month comparison of appreciation by price tier and location also reveals relative changes in demand across the country. In December, home prices were largely down across metros and price tiers. The exception was Boston and Miami where home prices stayed positive in all price tiers.

High-tier prices fell 0.3% on average across metros while the middle tier was flat. The low tier had an average decline of -0.1%. Again, Tampa had largest overall declines with the high-tier showing the largest pull back, falling 1.6%. Boston’s low-tier prices contrasted with the higher increase of 1% in this category.

As we look toward the 2025 home buying season, there is a lot of anticipation and uncertainty. Although the Federal Reserve’s decisions do play into this, the overall outlook is more closely related to the policy changes coming from DOGE. If the Trump administration’s large-scale government layoffs come to fruition, mid-Atlantic markets, particularly the Washington DC metro, could see unemployment and return-to-work mandates impact the markets. At the moment, uncertainty continues, and all eyes are focused on Washington.

In other markets, build-up of for-sale inventories in conjunction with relative affordability will determine each market’s buoyancy this spring. Currently, markets with continued price pressures include markets such as Boston and Chicago where inventories remain significantly below pre-pandemic levels.

On the other hand, Western markets such as Denver, San Diego, and Las Vegas remained relatively steady going into the end of the year despite having more inventory and being somewhat pricey. In each market, it could be more expensive homes that see persistent demand, as suggested by steady pricing of the middle-tier and high-tier homes.

Still, the pressure of elevated non-fixed homeownership costs — such as insurance and taxes — will continue to weigh down some markets like Tampa that have already weakened considerably in 2024. Additionally, the continued market bifurcation may mean very different trends emerge across the U.S. and cause home prices to follow divergent paths.