US Real Estate: Housing Prices

Macroeconomics and Politics
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US housing prices are a critical indicator for understanding inflation dynamics due to their substantial influence on consumer spending and overall price levels (over 30% of the CPI and approximately 15% of the PCE).

Changes in housing prices also affect consumer wealth and confidence, influencing demand-side inflation pressures.
Housing prices and rents are “sticky,” meaning they adjust slowly over time, making them a persistent driver of inflation trends.

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US Home Prices hit another all-time high in November, rising 3.8% y/y (vs 3.6 in October)

  • Affordability remains near record lows.
  • The average home price in the US is up over 53% in the last 5 years, more than double the increase in wages

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U.S. home prices, as measured by the Case-Shiller National Home Price Index, fell -0.2% between the November 2024 and December 2024 reading

  • +3.9% → Year-over-year (i.e. calendar year 2024)

  • +4.9% → Since the 2022 peak

  • +50.2% → Since March 2020

  • Zillow economists have downgraded their forecast, predicting that U.S. home prices will rise by just +1.1% between January 2025 and January 2026

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