Housing Market Stays Strong: FHFA HPI Shows 4.5% Growth, S&P CoreLogic Up 3.9%

National House Price Gains Persist

U.S. house prices rose 4.5% year-over-year in the fourth quarter of 2024, reflecting a modest acceleration in the housing market, according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI)​. The seasonally adjusted monthly index for December 2024 posted a 0.4% gain from November, signaling continued upward momentum. Meanwhile, the S&P CoreLogic Case-Shiller U.S. National Home Price Index recorded a 3.9% annual gain in December, up slightly from 3.7% in the previous month​.

Regional Disparities Highlight Market Trends

House price appreciation was widespread, with 49 states posting annual gains. Connecticut, New Jersey, and Wyoming led with 8.3% increases, while Mississippi experienced a slight decline of 0.2%​. Metropolitan areas also showed mixed performance; Urban Honolulu, HI, recorded the strongest growth at 18.7%, while Cape Coral-Fort Myers, FL, saw a 6.3% decline​. According to the S&P CoreLogic Case-Shiller Index, New York led the 20-city composite with a 7.2% gain, followed by Chicago (6.6%) and Boston (6.3%). Tampa reported the weakest performance, with a 1.1% annual decline​.

Census Divisions Show Varied Performance

All nine U.S. census divisions showed positive year-over-year price changes. The Middle Atlantic division topped the list with a 7.1% gain, while the West South Central division posted the smallest increase at 2.3%​. The Northeast continued to outperform, with Boston reaching an all-time high as the only market to do so in December​.

Market Drivers: Tight Inventory and Regional Factors

According to Dr. Anju Vajja, FHFA’s Deputy Director, tighter housing inventory contributed to the accelerated price growth in Q4 2024​. The S&P CoreLogic Case-Shiller report highlighted that while national prices remain above inflation, the pace of appreciation is below the historical trend, particularly in Western markets. San Francisco and Seattle faced notable declines of 4.5% and 3.0%, respectively, during the latter half of 2024​.

Market Forecast: Cautiously Bullish with Regional Considerations

The U.S. housing market is expected to maintain a cautiously bullish trend in the short term, driven by limited inventory and continued demand. However, regional disparities may create opportunities for traders, particularly in stronger markets like the Northeast while exercising caution in weaker Western markets. Traders should monitor upcoming FHFA and S&P CoreLogic releases for updated data, which may influence market sentiment and trading strategies.