#United States #New York #Home Prices #SP Dow Jones #Case-Shiller Index

S&P CoreLogic Case-Shiller Index Shows 4.1% Annual Growth in January 2025

On March 27, 2025, S&P Dow Jones Indices (S&P DJI) unveiled the results of its CoreLogic Case-Shiller Indices for January 2025, revealing a notable 4.1% increase in U.S. home prices compared to the same month last year. This slight rise also marks an improvement from the 4% recorded in December 2024.

Year-over-Year Trends

The S&P Case-Shiller U.S. National Home Price NSA Index encompasses all nine census divisions and indicated a consistent upward trend. The 10-City Composite index experienced a 5.3% annual increase, while the 20-City Composite index recorded a 4.7% rise, showcasing similar growth trajectories across major metropolitan areas.

Among the 20 cities surveyed, New York reported the highest annual gain, boasting a remarkable 7.7% increase in home prices in January. Chicago and Boston followed suit, with increases of 7.5% and 6.6%, respectively. On the contrary, Tampa witnessed a decline of 1.5%, illustrating the variable nature of housing markets.

Monthly Changes

Adjustments indicate slight increases on a month-over-month basis. Both the U.S. National and 20-City Composite Indices saw increments of 0.1%, while the 10-City Composite observed a 0.2% increase. After seasonal adjustments, both the 20-City and 10-City Composite Indices posted significant month-over-month leaps of 0.5% and 0.6%, respectively.

Market Analysis

Nicholas Godec, Head of Fixed Income Tradables Commodities at S&P Dow Jones Indices, remarked on the contrasting dynamics in the housing market over the past year. Home price growth was predominantly driven by a robust first half of the year, yielding a 4.8% rise, followed by a downturn in the latter half, during which prices fell by 0.7%. Factors such as escalating mortgage rates and challenges to affordability notably dampened buyer interest and overall market activity.

Leading the annual gains, New York City stood out for its pronounced price appreciation. However, markets like San Francisco and those in the Sunbelt regions, including Tampa, experienced marked price declines due to previous overheating.

The continuous rise in mortgage rates exacerbated affordability issues throughout the year, placing pressures on both buyers and sellers. The limitations in housing inventory further complicated the situation, particularly in established metropolitan regions where new construction has not kept pace with demand.

Despite short-term fluctuations, the current levels of the S&P CoreLogic Case-Shiller Index remain historically strong. Godec emphasized the enduring value of real estate as a long-term investment, reiterating the sensitivity of housing prices to shifting financing terms and buyer affordability.

Supporting Data

To illustrate this analysis, data from the last decade indicates a dramatic recovery in housing prices since the lows of 2012. The National index has surged by 141.5% since its trough, reflecting the strength of the market post-recession. Notably, the index currently stands at 323.54, far exceeding the peak values preceding the housing crisis.

This substantial increase in home prices aligns with ongoing trends across various metro areas, underscoring the complex landscape of the American housing market in early 2025. As conditions continue to evolve, market observers and potential buyers will need to navigate these changes with careful consideration.