The January 2025 Home Price Index (HPI) study was released today by First American Data & Analytics, a branch of First American Financial Corporation.
The report includes metropolitan pricing tiers that divide sale transactions into starter, mid, and luxury tiers, and it follows changes in home prices at the national, state, and metropolitan (Core-Based Statistical Area) levels less than four weeks behind real time.
“National house price growth slipped to the slowest pace since June 2023 amid elevated mortgage rates and rising inventories,” said Mark Fleming, Chief Economist at First American. “Elevated mortgage rates reduce house-buying power for potential buyers, holding back demand. At the same time, inventory levels are increasing as some potential sellers list their homes for sale after coming to terms with ‘higher-for-longer’ rates and more new-home completions hit the market, further dampening price growth. Much like the groundhog seeing its shadow, we expect this ‘housing winter’ to persist if mortgage rates remain high while inventories keep climbing.”
| First American Data & Analytics’ National Non-Seasonally Adjusted (NSA) HPI | |
| Metric | Change in HPI |
| December 2024-January 2025 (month over month) | +0.1 % |
| January 2024-January 2025 (year over year) | +3.3% |
Based on local market sales data, the First American Data & Analytics HPI divides changes in home prices at the metropolitan level into three price tiers: the luxury tier, which has home sales prices in the top third of the market price distribution; the mid-tier, which has home sales prices in the middle third of the market price distribution; and the starter tier, which has home sales prices at the bottom third.
“The luxury price tier stands out as a relative outperformer when measuring annual house price growth by tier and market. Prices in the luxury tier grew in 25 of the 28 markets we tracked this month, outpacing price growth in the mid- and starter tier segments,” Fleming said. “Luxury home buyers, less affected by the lock-in effect due to their ability to pay in cash, are playing a different game. In December’s existing-home sales report, the boom in sales was most distinct at the upper end of the market as sales of homes priced at more than $1 million jumped 35 percent nationally, followed closely by homes in the $750,000-$1 million range, which spiked 33 percent. Existing homeowners are playing ‘housing musical chairs’ by selling to each other, a dynamic that is keeping luxury price growth strong in many markets.”
To read the full report, including more data, charts, and methodology, click here.
