SEATTLE, WA — U.S. home prices rose by 0.6% in January 2025 compared to December on a seasonally adjusted basis, marking a slight acceleration from the 0.5% growth rate observed in each of the prior three months, according to a new report from Redfin. This represents the fastest month-over-month price increase since November 2023, when prices grew by 0.7%.
On a year-over-year basis, home prices grew by 5.4%, the slowest annual pace of growth since August 2023. Redfin’s findings are based on the Redfin Home Price Index (RHPI), which calculates price changes for single-family homes using repeat-sales data.
The report highlights that while January still reflected modest price growth, momentum in the housing market seems to be softening due to slower sales and an increase in new listings.
“Price growth in January mainly relates to homes that went under contract in December. Since then we have seen a slowdown in sales, along with an uptick in homes being listed,” said Sheharyar Bokhari, Redfin Senior Economist. “That’s likely to lead to slightly slower price growth moving forward because not only are homes sitting longer on the market, when they do go under contract, they are selling at nearly 2% under list price—the biggest discount in nearly two years.”
Metro-Level Trends
At a regional level, 20% of the top 50 largest U.S. metro areas experienced a decline in home prices compared to December. Tampa, FL, led with a 1.6% month-over-month drop, followed by Dallas (-0.9%) and Oakland, CA (-0.7%).
Conversely, areas such as Pittsburgh, PA, saw robust price gains of 3%, the highest among all metro areas, with Nassau County, NY, and Philadelphia also recording significant increases at 2.8% and 2.6%, respectively.
Outlook
The January housing market data underscores a complex environment shaped by changing buyer and seller dynamics. Rising inventory levels and longer listing times are contributing to price stagnation in some areas, while others—especially in the Northeast—continue to see robust growth.
Looking ahead, the combination of slower sales activity and increased discounts on listed properties may result in a more balanced market, easing the pace of rising home prices. Economic conditions and regional factors will continue to play critical roles in shaping the housing market trajectory in 2025.
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