Price Appreciation Hit 4.1% YOY In January

ByTMN Editor Reading Time: 2 minutes

Home price appreciation gained steam in January despite a demand slowdown in the last half of 2024.

Prices rose by 4.1% YOY in January, up from December’s 3.9% and November’s 3.8%, according to the S&P CoreLogic Case-Shiller National Home Price NSA Index. 

The 10-City Composite increased annually by 5.3%, effectively flat from the previous month. The 20-City Composite posted a year-over-year increase of 4.7%, up from a 4.5% increase in the previous month. 

After seasonal adjustment, 20-City and 10-City Composite Indices all posted a month-over-month increase of 0.5%, while the U.S. National inched up 0.6%.

New York again reported the highest annual gain among the 20 cities, with a 7.7% jump in January. Chicago and Boston kept their second and third spots with annual increases of 7.5% and 6.6%, respectively. 

Of the 20 analyzed metro areas, only New York, Chicago, Phoenix, and Boston posted increases in the last half of 2024, denoting “broad-based cooling,” according to Nicholas Godec, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices.

“Rising mortgage rates throughout the year elevated monthly payment burdens, which, combined with already high home prices, pushed affordability to multi-decade lows in many regions. This likely contributed to subdued activity in the back half of the year, with both buyers and sellers exercising caution,” he said.

Still, the indices posted their 20th consecutive all-time high.

“Despite near-term softness, the S&P CoreLogic Case-Shiller Index remains historically elevated, and long-term homeowners have continued to build equity. The current cycle reinforces the value of real estate as a long-duration asset, but also highlights how sensitive home prices are to changes in financing conditions and buyer affordability,” Godec added.

The Federal Housing Finance Agency’s latest House Price Index, meanwhile, showed prices up 0.2% in January and 4.5% annually.

After inflation adjustment, however, real house prices were down 0.3% on the month and up 2.6% YOY. This is the first monthly decline in ten months and the smallest annual growth since June 2023.