What does the data show?
The S&P Cotality Case-Shiller Home Price Index showed national home price growth continuing to decelerate through January, with the U.S. National Index rising 0.9% year over year, down from 1.1% in December and 1.3% in November. The slowdown underscores how affordability constraints and low turnover have continued to weigh on housing momentum. The 10-City posted a gain of 1.7%, while the 20-City Composites also rose by 1.2%. January’s release reflects closings from November through January, a period when mortgage rates hovered near 6%, briefly touching their lowest levels since late 2022 before rising more recently.
Recent housing activity continues to reflect a market stabilizing from a low base rather than building toward a broader rebound. Existing-home sales rose 1.7% month-over-month in February to an annualized pace of 4.09 million, recovering from a weather-dampened January, but sales remain down 1.4% year-over-year. Total home sales for 2025 came in at their lowest level in roughly three decades, underscoring how persistently elevated prices and borrowing costs continue to weigh on participation. The lock-in effect is gradually easing as the share of mortgages at 6% or higher grows. However, the majority of homeowners still carry rates well below current market levels, constraining the flow of new listings and keeping resale inventory from recovering more meaningfully.
How did trends vary by region?
Regional divergence widened further. Northeast and Midwest metros again led performance, with New York (+4.9%) posting the strongest annual gain among the 20 tracked cities, followed by Chicago (+4.6%) and Cleveland (+3.6%). These markets continue to benefit from tighter resale inventory and more constrained new supply. By contrast, several Sun Belt metros extended their corrections, with Tampa falling 2.5% year over year. Markets that experienced outsized pandemic-era appreciation continue to see more persistent normalization as inventory rebuilds and demand remains payment-sensitive.
On a monthly basis, the data were soft but not alarming. Before seasonal adjustment, the National Index and the 20-City Composite each declined 0.1%. After seasonal adjustment, all three indices posted modest 0.2% monthly gains, suggesting that while year-over-year growth has cooled substantially, underlying price levels are adjusting gradually rather than correcting sharply.
What is ahead for housing?
Looking ahead, the spring selling season arrives with mixed signals. Mortgage rates have risen to 6.38% as of late March, driven higher by geopolitical uncertainty and renewed inflation concerns, introducing fresh headwinds just as seasonal activity typically picks up. At the same time, affordability conditions had been improving through the early months of the year, and inventory is well above year-ago levels in many markets. Whether the recent rate reversal proves temporary or persistent will go a long way toward shaping price dynamics and sales activity through the spring. A sustained return to lower rates could help unlock more demand, but the pace of any recovery will depend heavily on whether fresh listings keep pace. In markets where inventory remains tight, price growth is likely to hold up even as the national picture continues to cool.
