Home sellers cut prices slightly in January, but housing costs are expected to recover and rise to new highs in 2025, according to a forecast by CoreLogic’s home price index (HPI).
The index showed that January home prices fell 0.2% from December levels. However, home prices on a year-over-year basis are expected to rise 4.1% between December 2024 and December 2025.
CoreLogic found that December home prices nationwide barely budged, rising 0.03% when compared to November prices, but still rose 3.4% year over year from December 2023 to December 2024.
While the housing supply improved in 2024, buyer demand remained restrained. As a result, home-price growth held steady at an annual rate of about 3.4% since September, according to CoreLogic. But the company’s HPI forecast is for home prices growth to climb this year as the spring homebuying season kicks in.
Home prices last year rose over much of the country. The Northeast, for instance, continues to show strong growth, while home prices in Arkansas, Oklahoma and Missouri are reaching new records, according to CoreLogic. The average median home price for a single-family home was $390,000 in December 2024.
CoreLogic reports that the Trump administration’s proposal to place tariffs on imports and January’s destructive wildfires in Los Angeles County are expected to increase building material costs in the short-term and delay home construction. Inevitably, these costs will be passed on to homebuyers and property owners.
“Home prices have remained flat since the housing market began seeing slower activity this past summer,” said Selma Hepp, CoreLogic’s chief economist in a statement. “Bifurcation across markets has also persisted. Northeastern markets drove appreciation growth due to low inventories of homes for sale, while Southern markets readjusted to higher inventories and increases in variable mortgage costs, such as taxes and insurance. Home prices are also cooling in the markets in Mountain West, which have been trying to find stability over the last year following the surge in mortgage rates and price declines from pandemic highs.”
The states with the highest increases in year-over-year home prices in 2024 were Connecticut, where prices were up 7.8% and New Jersey, which saw a 7.7% increase. Hawaii saw the largest decrease, with home prices falling 1.1%. It was followed by the District of Columbia, where home prices fell 0.7%.
The HPI identified year-over-year home price increases in select U.S. metropolitan areas as of August 2024. They included Chicago, where home prices rose 5.6%, followed by Las Vegas at 5%, Boston at 4.8% and Washington, D.C. at 4.4%
CoreLogic’s market risk indicator predicts that Provo, Utah, is the nation’s top market at risk of home-price declines during the next 12 months. Tucson was next, followed by Albuquerque, New Mexico; Phoenix; and the West Palm Beach area of Florida.
