UK house prices unexpectedly fell last month for the first time since last March, but separate data showed the wider construction industry remained in expansion territory.
Lender Halifax's house prices index fell 0.2% month-on-month in December, when economists expected it to rise 0.8% following a previous 1.3% gain.
On an annual basis, house prices were up 3.3%, following a 4.8% gain in November.
Also on Tuesday, the UK construction purchasing managers' index showed a drop last month but remained in positive territory.
The CIPS construction PMI fell to a six-month low of 53.3 in December, from 55.2 in November, although as it is still well above the 50 expansion/contraction level this indicates construction activity is still expanding.
Three of the industry subsectors were positive, but the housing balance, which fell to a one-year low of 47.6, was consistent with a contraction in residential construction activity.
Economist Matthew Pointon at Capital Economics said the housing balance's one-year low reflects "concerns around higher interest rates, which will act to both raise the cost of construction and dampen house prices".
He said that higher interest rate expectations have had less of an impact on commercial activity.
"And looking ahead, gilt yields are set to trend down this year. That should support a gradual recovery in development starts."
Elliott Jordan-Doak at Pantheon Macroeconomics says the PMI shows business sentiment in the sector "well ahead of the pessimism evident in the services and manufacturing surveys released recently".
He estimates the PMI is still consistent with construction sector output rising at a healthy clip of 0.8% on a three-month-on-three-month basis.
"The sector should continue to outperform as government spending supports building, and planning reforms help unblock the pipeline of projects."
Matt Swannell of the EY ITEM Club said the fall in house prices followed a pick-up in the second half of 2024 after the Bank of England started to lower interest rates.
"However, compared to late summer, financial markets now expect fewer interest rate cuts, partly reflecting the implications of the UK autumn Budget and the US presidential election," he said.
"In response, quoted new mortgage rates rose a little towards the end of last year, although the interest rates on new mortgages are still below the levels seen in the first half of 2024."
Nonetheless, with the expiry of the temporary increase in Stamp Duty thresholds in March, he expects the housing market recovery to "continue in the near-term" but given the responsiveness of housing demand to mortgage rates, a rise in interest rates "could weigh on activity a little."
Beyond the next few months, he said the EY ITEM Club expects the BoE to lower interest rates "relatively slowly" through 2025, settling at rates above those seen pre-pandemic.
"Given the fact that housing valuations remain quite high, this will likely lead to only a gradual improvement in housing market activity."