Home price appreciation may be heading for a slowdown during the next year, according to CoreLogic, a real estate data analytics company.
In fact, price softening has already begun. Average home prices are forecast to fall by 0.03% between October and November of this year. Overall, home prices are expected to increase by 2.4% between October of this year and October of 2025. In contrast, home prices between October 2023 and October 2024 rose 3.4%.
Prices have remained relatively flat since the summer, only increasing in select areas of the country, including the Northeast, which has proven stronger than other regions despite slow job growth and high interest rates. The state with the strongest home price appreciation was New Jersey, where October home prices were up 8.1% year over year. Other Northeast states that saw high price appreciation include Rhode Island, where prices were up 7.5% and New Hampshire (6.3%).
States and districts that have fallen furthest from their price peaks earlier this year include the District of Columbia, which is down 3.5%, but is still up 4.7% year over year; Idaho, which has fallen 2.5%; and Montana, down 2.1%. Hawaii is the only state to post an annual home price decline.
“Similar to much of the housing market activity, home prices continued to mostly move sideways in October,” said Selma Hepp, CoreLogic’s chief economist. “A slight home price bump after a late summer decline reflects the rebound in homebuying demand resulting from a short but effective decline in mortgage rates in August.”
CoreLogic forecasts that national single-family home prices will reach a new peak level in April 2025. Hepp said that in the last few years springtime has seen home prices jump higher than before the pandemic despite elevated mortgage rates.
However, there are a cities where home prices may be unsustainable at current levels. Five metropolitan areas that CoreLogic identifies as having a greater than 70% chance of home price declines during the next 12 months include Provo-Orem, Utah; Salt Lake City; Atlanta; Tucson; and Palm Bay-Melbourne-Titusville, Florida.
