Excerpt:
Earlier I posted some questions on my blog for next year: Ten Economic Questions for 2025. Some of these questions concern real estate (inventory, house prices, housing starts, new home sales), and I’ll post thoughts on those in this newsletter (others like GDP and employment will be on my blog).
I’m adding some thoughts and predictions for each question.
Here is a review of the Ten Economic Questions for 2024.
9) House Prices: It appears house prices – as measured by the national repeat sales index (Case-Shiller, FHFA, and Freddie Mac) – will be up 3% to 4% in 2024. What will happen with house prices in 2025?
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The following graph shows the year-over-year change through September 2024, in the seasonally adjusted Case-Shiller Composite 10, Composite 20 and National indices (the Composite 20 was started in January 2000). The Case-Shiller Home Price Indices for “September” is a 3-month average of July, August and September closing prices. September closing prices include some contracts signed in May, so there is a significant lag to this data.
The Composite 10 SA was up 5.2% year-over-year in September. The Composite 20 SA was up 4.6% year-over-year. The National index SA was up 3.9% year-over-year. All were at new all-time highs in September.
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Supply and demand are the keys for house prices; however, national house prices will mask some regional differences. We are seeing significant regional differences in supply at the end of 2024, with inventory increasing sharply in Florida and parts of Texas (and some other areas).
