Case-Schiller Index Records 4.1% Annual Gain in January

(Illustration credit: Mike Sorohan)

One measure of U.S. home prices recorded a 4.1% annual gain in January, a slight increase from the December 2024 rate.

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index reported a 4.1% annual return for January, up from a 4% annual gain in the previous month.

“Home price growth continued to moderate in January, reflecting a clear two-part story across the past year,” said Nicholas Godec, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. He noted most of the appreciation–4.8%–occurred in the first half of the year and said prices declined 0.7% in the second half as high mortgage rates and affordability constraints weighed on buyer demand and market activity.

“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,” Godec noted. “This likely contributed to subdued activity in the back half of the year, with both buyers and sellers exercising caution. Inventory constraints also remain a challenge, particularly in legacy metro areas, where limited new construction continues to restrict supply.”

Godec said the strength in markets like New York and Chicago may reflect more normalized valuations relative to frothier regions, along with continued urban recovery trends post-pandemic. “On the other hand, Sunbelt markets that experienced sharp run-ups earlier in the cycle—like Tampa and Phoenix—have seen the most pronounced slowdowns,” he added.

“Despite near-term softness, the S&P CoreLogic Case-Shiller Index remains historically elevated, and long-term homeowners have continued to build equity,” Godec concluded. “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.”