Home prices continue to grow across the country. Nationally, they rose 3.9% in December, according to the latest Case-Shiller Index. That’s up slightly from November.

Prices are growing fastest in the Northeast. In New York, they were up about 7%, and Boston wasn’t far behind. In Tampa, meanwhile, prices fell just over 1%. 

This time three years ago, home prices had risen almost 19% year-over-year. 

Compared to that, Sam Chandan at New York University’s Stern School of Business said 3.9% is more manageable. 

But, said Chandan, “Even these relatively small increases are on the top of generationally high levels of prices.” 

In some Sunbelt markets that saw big spikes early in the pandemic, there’s been a lot of new construction. And Chandan said that has helped balance supply and demand and slow price growth. 

In addition, said Chandan, there’s anecdotal evidence “that some homebuyers in Florida and elsewhere may be thinking also about the impact of climate change.” Not necessarily worrying about the next major hurricane, he said, but about rising insurance costs. 

“Part of the competitive advantage for some of these markets historically has been that they’re much more affordable than the Northeast, than California,” said Chandan. 

But as home prices and insurance costs have gone up in Florida, he said, some of that affordability advantage has disappeared. 

Brian Luke at S&P Dow Jones said home prices are now rising fastest in the Northeast, a switch from early in the pandemic. 

“Less volatility in those markets, more of a slow plodding upward,” said Luke. 

The Northeast has long been expensive with consistently high demand. One reason prices keep rising there is because there’s not much new inventory, said Ali Wolf, chief economist at the housing data and consultancy firm Zonda.

“There’s not much developable land, it’s expensive, there’s a lot of regulation, and so you’re not finding that home builders can come into the market, increase supply and help with home price appreciation,” said Wolf. 

And nationally, Sam Chandan at NYU said there are other structural factors keeping prices high. 

“The cost of construction labor, of softwood lumber, the potential for disputes with our trading partners to inflate the cost of some of the materials that we use in home building,” said Chandan. 

These are all features of the housing market that he said aren’t going away any time soon.