The longstanding hindrance of high prices preventing buyers from entering the home-buying market as a national trend could be giving way to more selective areas of appreciation, with home-price growth leveling off in others.
The S&P CoreLogic Case-Shiller Home Price Index—which measures U.S. home prices on a two-month lag—continued its downward trajectory of annual growth with a sharp decline in the June index (measuring up to April 2025).
The Case-Shiller index, which has largely hovered around a 3% increase since the November 2024 index (measuring up to September), fell to a 2.7% annual growth rate in its latest reading. According to the index’s readings, this is the lowest that annual home price growth has been since mid-2023.
Nicholas Godec, head of Fixed Income, Tradables and Commodities at S&P Dow Jones Indices, stated in the Case-Shiller press release that the index results point to “a housing market in transition.”
“The era of broad-based, rapid price appreciation appears over, replaced by a more selective environment where local fundamentals matter more than national trends,” said Godec.
“While annual national home price growth continues to slow, a weak spring home-buying season has also resulted in relatively muted home price gains so far this year,” said Dr. Selma Hepp, chief economist at Cotality (formerly CoreLogic), in a statement, noting recent annual and monthly price growth rates have slowed down. “While slower gains reflect affordability challenges in many markets, rising inventory levels are also helping keep home price growth muted.”
In a press release, Realtor.com® Senior Economist Anthony Smith observed that during the months this June index covers (February, March, April), the market was affected mostly by consumer sentiment and elevated mortgage rates. Despite higher inventory, buyers remain cautious due to those mortgage rates and other affordability barriers, Smith said.
“Economic uncertainty and elevated rates are likely to keep housing activity slower than usual this spring,” said Smith. “Regional market strength will depend heavily on local inventory dynamics, which have been correlated with construction trends, and how mortgage rates evolve over the summer. Limited inventory continues to support prices, and future supply may be constrained.”
New construction fell in May, Smith observed, but the rate of construction completions remains elevated, which could suggest short-term inventory strength but herald long-term inventory struggles.
Hepp predicted that “the national home price appreciation is likely to pick up pace again due to the base effect of comparison with flat home prices in the second half of 2024.”
Regional breakdown
Of the 20 major U.S. metro markets surveyed by Case-Shiller, 15 saw negative price growth (seasonally adjusted) between March and April. The exceptions that posted positive growth were primarily (but not exclusively) located in the Midwest:
- New York City, New York (0.63% growth)
- Chicago, Illinois (0.34%)
- Cleveland, Ohio (0.29%)
- Detroit, Michigan (0.06%)
- Tampa, Florida (0.01%)
Of the remaining markets, the ones that posted the greatest annual price decreases at seasonally adjusted rates were largely Western markets, including some that rank among the most expensive in the country:
- San Francisco, California (1.20% price decrease)
- Los Angeles, California (1.05%)
- Phoenix, Arizona (0.91%)
- Seattle, Washington (0.86%)
- Denver, Colorado (0.77%)
In the Case-Shiller press release, Godec observed that regional price changes represent a shift from pandemic trends.
“Markets that were pandemic darlings are now lagging, while historically steady performers in the Midwest and Northeast are setting the pace,” said Godec. “This rotation signals a maturing market that’s increasingly driven by fundamentals rather than speculative fervor.
In the Realtor.com press release, Smith points to the Northeast and Midwest as having the tightest inventory, so “demand still exceeds supply.” Hence, metro areas in these regions are leading in annual price growth.
Hepp observed in the Cotality press release that: “Softness remains concentrated in the markets in Florida, Texas and desert West, however even in the other markets that experienced a typical spring bump in prices, those gains lagged the typical jumps seen in the years prior to the pandemic.”
Hepp further characterized Midwest and Northeast markets (particularly Wisconsin, Indiana and New Jersey) as regions “where spring gains have exceeded pre-pandemic trends and home-buying demand has been solid, but are also the markets with less inventory improvements this spring.”
For the full Case-Shiller release, click here.
