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Houston-The Woodlands-Sugar Land Market: Modest House Price Growth in 2024 Amid Higher Mortgage Rates and Inventory
ByAinvest
Monday, Jan 27, 2025 9:12 am ET1min read
According to the First American Home Price Index, national house prices grew modestly in 2024, cooling due to higher mortgage rates and inventory levels. The Houston-The Woodlands-Sugar Land metro area saw a 2.1% year-over-year price increase. Chief Economist Mark Fleming predicts moderate price appreciation in 2025, with areas facing supply growth outpacing demand potentially experiencing price declines or moderation.
According to the latest report from First American Data & Analytics, national house prices grew modestly in 2024, with the Houston-The Woodlands-Sugar Land metro area experiencing a 2.1% year-over-year price increase [1]. This cooling trend is attributed to higher mortgage rates and inventory levels [1].Chief Economist Mark Fleming predicts moderate price appreciation in 2025, with areas facing supply growth outpacing demand potentially experiencing price declines or moderation [1]. The structural housing shortage nationally will keep a floor on how low prices can go, but a "higher-for-longer" rate environment and inventory growth could cause further price moderation [1].
The housing market started the year strong, with house price growth at a 7% annualized pace. However, this trend gradually slowed, ending the year in the high 3% year-over-year growth range [1]. Higher mortgage rates, combined with increased inventory levels, triggered the cooling trend [1].
The First American Data & Analytics HPI segments home price changes at the metropolitan level into three price tiers based on local market sales data: starter, mid, and luxury [1]. The report highlights that while some areas may experience price declines or moderation due to supply growth outpacing demand, others with limited new supply may see steadier price growth or even price reacceleration [1].
References:
[1] First American Financial. (2025, January 5). National House Prices Grew Modestly in 2024, According to First American Data Analytics Monthly Home Price Index. Retrieved January 5, 2025, from https://www.marketscreener.com/quote/stock/FIRST-AMERICAN-FINANCIAL--12546/news/National-House-Prices-Grew-Modestly-in-2024-According-to-First-American-Data-Analytics-Monthly-Ho-48881008/
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