First American Data & Analytics released its December 2024 Home Price Index (HPI) report.
The report tracks home price changes less than four weeks behind real-time at the national, state and metropolitan (Core-Based Statistical Area) levels and includes metropolitan price tiers that segment sale transactions into starter, mid and luxury tiers.
House prices nationally are now 54.8 percent higher compared to pre-pandemic levels seen in February 2020. House price decline reported in last month’s HPI for October 2024 to November
“House price growth nationally started 2024 strong at a 7 percent annualized pace of growth but gradually slowed over the course of the year, ending in the high 3 percent year-over-year growth range. Higher mortgage rates in the latter half of the year, combined with higher inventory levels, triggered the cooling trend. If similar conditions persist through 2025, we should expect very moderate price appreciation,” Mark Fleming, chief economist at First American, said in a release. “Areas with rapid supply growth that outstrips demand may face stronger moderation or even price declines, while areas with limited new supply may see steadier price growth or even price reacceleration. The structural housing shortage nationally will keep a floor on how low prices can go, but a ‘higher-for-longer’ rate environment and inventory growth could cause further price moderation.”
The First American Data & Analytics HPI segments home price changes at the metropolitan level into three price tiers based on local market sales data: starter tier, which represents home sales prices at the bottom third of the market price distribution; mid-tier, which represents home sales prices in the middle third of the market price distribution; and the luxury tier, which represents home sales prices in the top third of the market price distribution.
Pittsburgh ranked first among core-based statistical areas with a 9.5 percent increase in starter-tier HPI, followed by Cambridge, Mass., (6 percent), New York (5.3 percent), St. Louis (5.1 percent) and Anaheim, Calif. (5 percent).
“House price growth has varied considerably at the regional level over the last year, largely driven by differences in for-sale inventories,” said Fleming. “As more homes become available, the power dynamics can shift in favor of buyers, putting downward pressure on prices,” said Fleming. “All else equal, house price growth in markets with higher inventory of homes available for sale will weaken compared to those with low inventory relative to demand.”