Housing costs again had a big impact on the latest inflation reading. But there seem to be some hopeful signs in the latest data, experts said.

The December Consumer Price Index (CPI) showed prices ticked up slightly at 0.3% over last month, an increase from the 0.2% gain seen in November. Prices rose 3.4% over the prior year, an increase from the 3.1% annual increase seen the month prior.

Meanwhile, the shelter component of the CPI increased 0.5% in December from the previous month, up from November’s 0.4% monthly gain. Housing costs made up "the largest factor in the monthly increase in the index for all items less food and energy," the Bureau of Labor Statistics said Thursday, contributing "over half of the monthly all items increase."

On a year-over-year basis, shelter inflation remained high — up 6.2% over the last year. The optimistic take: that's lower than November’s 6.5% year-over-year figure and March’s peak of 8.2%.

"We're on the cusp of another step down in shelter inflation," Omair Sharif, president of Inflation Insights, told Yahoo Finance following the release.

Before Thursday's CPI report, other experts were anticipating shelter costs to continue moderating. But relief on housing costs will take time to show up in the numbers, they said.

"We're seeing stronger household formation than we expected, and that's translating into greater demand and therefore higher rents, and therefore a slower decline in the household, in the shelter component of CPI," Brad Case, chief economist at Middleburg Communities, told Yahoo Finance ahead of the release.

Overall, the shelter index contributes about a third of the CPI calculation. It’s made up of four components including rent; owner's equivalent rent, or OER; lodging away from home; and household insurance.

Owner’s equivalent rent, or OER, and rent make up the biggest chunk of the shelter component — about 96%. OER measures what price homeowners would get for their home on the rental market and indirectly correlates to housing price growth.

OER has stayed in a range of 0.4% to 0.6% per month since March. In December, OER continued its steady 0.5% monthly gain, similar to November’s print, while rent prices were unchanged from the previous month, logging in another 0.4% gain.

The rent measure can seem outdated compared to private indexes that look at current leases, but this component tends to be a lagging indicator.

As a result, some experts expect year-over-year shelter inflation to drop lower later this year.

"We did see that observed rents bottomed out in terms of growth around August, September, October of last year," Sam Millette, director of investment management and research at Commonwealth Financial Network, told Yahoo Finance ahead of the release. "I would expect to see by that point in this year, the shelter component of CPI continuing to move down and potentially getting to a bottoming out point."

Separately, home prices — which indirectly influence OER — have extended their climb. The S&P CoreLogic Case-Shiller National Home Price Index rose 4.8% from a year earlier in October. The October level, the latest month available, was the strongest national growth rate since 2022, per analysis gathered by S&P Dow Jones Indices.

Read more: How to buy a house: 13 steps to getting the keys to your new home

However, house price growth is likely to ease this year. Morgan Stanley’s home price outlook reflects "a mild decrease in home prices in 2024 despite improved affordability and the growth in sales," the strategists wrote. In November, the firm forecasted a 3% drop in home prices throughout this year.

This "would be supportive of lower shelter costs over the long run [but] there is a lag effect between housing prices and rent changes and because of how lagged it can be, I wouldn't expect it to have an immediate impact in 2024 inflation figures," Millette said.

While housing costs continue to trend down, Millette believes that the Fed might be comfortable cutting rates before getting shelter and inflation down to its 2% target. Policymakers have set the table for multiple cuts this year, but December’s accelerated inflation print could temper the case for them.

Read more inflation coverage:

• Inflation increases more than expected in December

• Stock market news today: US stocks slide as inflation jumps more than expected

• Energy prices jump, helping drive hotter-than-expected inflation in December

• CPI: Auto prices moderate in 2023, with disinflation hitting new vehicle prices

• How new inflation numbers complicate the Fed's next move on rates

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Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv.

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