The closely watched Case-Shiller Home Price Index showed prices dipped 0.3% from November to December before seasonal adjustments. After accounting for typical seasonal trends, prices actually rose 0.4%, marking another month of solid gains. On an annual basis, national home prices are up 1.3%.
The Federal Housing Finance Agency (FHFA) House Price Index, which tracks homes financed with conventional mortgages, reported a 0.1% month-over-month increase on a seasonally adjusted basis and a 1.8% rise year over year.
What’s the bottom line?
As mortgage rates have eased, more buyers have returned to the market. At the same time, builders remain cautious, and adding new supply takes time due to permitting and construction timelines. When demand improves but inventory grows slowly, prices tend to stay supported. If rates continue to move lower, renewed demand could place additional upward pressure on home values.
Looking ahead, Fannie Mae and Pulsenomics recently released their Home Price Expectations Survey, which polls 150 top economists for their forecasts. The current median projection calls for 15% cumulative price growth over the next five years. For perspective, a $500,000 home could gain approximately $75,000 in value during that time – highlighting the long-term wealth-building potential of homeownership.
