Key Takeaways
- The S&P CoreLogic Case-Shiller price index revealed a 3.9% annual rise in U.S. home prices for December.
- Rising home prices may increase sellers’ profits but also place added pressure on buyers, making homes less affordable.
- While home prices rose nationally, some once-hot real estate markets experienced price declines.
In December, the U.S. housing market saw a modest 3.9% year-over-year increase in home prices, according to the S&P CoreLogic Case-Shiller price index. This increase marked a bounce back from a slight slowdown in the second half of 2024. While the nationwide trend reflected a growth in home prices, not every market followed suit.
Some once-booming real estate hotspots, like San Francisco, San Diego, and Tampa, experienced declines. San Francisco’s housing prices were 11% lower than their post-pandemic peak in May 2022, and both San Diego and Tampa saw prices drop by 2.9% and 2.7%, respectively, in the second half of the year.
Robert Frick, corporate economist at Navy Federal Credit Union, pointed out that while some U.S. markets are showing price drops, home price inflation is still evident across the country, primarily due to the ongoing shortage of homes for sale. He noted that high mortgage rates, combined with limited housing inventory, are pushing home affordability further out of reach for many Americans.
As sellers continue to see higher profits, buyers are feeling the pressure, with affordability becoming an increasingly significant challenge in various markets.
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