Housing market cools as price growth hits slowest pace since Great Recession recovery

• Kahului-Wailuku, Hawaii saw the steepest decline at 8% year-over-year, with Texas and Florida markets also experiencing significant drops ranging from 5-7%
• Youngstown, Ohio led price growth at 15.9%, with Indiana markets (Terre Haute at 11.4%, Columbus and Muncie at 10.2%) among the hottest
• The slowdown suggests the market is stabilizing after extended imbalance, with future trajectory dependent on wage growth and buyer purchasing power recovery

Market Summary: U.S. Housing Market Shows Significant Cooling

Key Findings

The U.S. housing market has experienced a notable slowdown, with annual home price growth decelerating to just 0.9% in December, marking the weakest pace since the post-Great Recession recovery period. Data from Cotality, a real estate analytics firm, reveals a "significant departure" from recent years' rapid price surges.

Geographic Performance

Declining Markets: The South and West regions show the steepest price declines, particularly in areas that previously experienced strong in-migration and expansion:

• Kahului-Wailuku, Hawaii: -8.0% (largest decline)
• Texas markets: Victoria (-7.4%), Wichita Falls (-7.2%)
• Florida dominates decline list with five localities in the top 10, led by Naples (-6.8%), Cape Coral and Punta Gorda (-6.2% each)
• West Coast: Vallejo, California (-7.1%)

Rising Markets: Midwest and smaller metros show strength:

• Youngstown, Ohio: +15.9% (hottest market)
• Indiana: Four markets in top performers, including Terre Haute (+11.4%)
• Illinois: Decatur (+10.5%), Peoria (+8.9%)

Market Implications

Chief economist Selma Hepp indicates the market is "finally becoming more navigable for prospective buyers" after extended imbalance. However, the 2025 trajectory depends heavily on wage growth and whether buyers can regain sufficient purchasing power to meet seller pricing expectations.

The cooling reflects moderating in-migration trends and increasing inventory levels in previously hot markets, suggesting a rebalancing after years of rapid appreciation. The market appears to be stabilizing but remains in transition.