Sequential home price growth sped up at the fastest pace since November 2023, reflecting an increase in demand at the end of 2024 that has since cooled, Redfin (RDFN) said on Tuesday.

Home prices were up 0.6% month to month in January, outpacing 0.5% growth experienced in each of the three months prior, the real estate brokerage's report showed.

"Price growth in January mainly relates to homes that went under contract in December," said Redfin Senior Economist Sheharyar Bokhari.

On an annual basis, prices increased 5.4%, which Redfin said was the slowest pace since August 2023.

With home sales slowing down in 2025 at the same time inventory has increased, price growth is expected to cool slightly moving forward, according to Bokhari.

In January, 10 of the 50 most populous US metro areas recorded a seasonally adjusted drop in home prices month over month, led by Tampa, Florida, according to Redfin's data.

"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," Bokhari said.

Rates for 30-year fixed-rate mortgages reached above 7% during the week ended Jan. 16, according to Freddie Mac data. Since then, rates have declined for four weeks straight through Feb. 13.

Homebuilder confidence deteriorated in February, falling to the lowest level in five months, data from the National Association of Home Builders and Wells Fargo showed Tuesday.

"Uncertainty on the tariff front helped push builders' expectations for future sales volume down to the lowest level since December 2023," NAHB Chairman Carl Harris said. "Incentive use may also be weakening as a sales strategy as elevated interest rates reduce the pool of eligible home buyers."