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U.S. home-price growth eased further at the end of 2025, according to new data from S&P Dow Jones Indices. The S&P Cotality Case-Shiller U.S. National Home Price NSA Index recorded a 1.3% annual gain in December 2025, slightly below the 1.4% year-over-year increase posted in November. Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, noted that the 1.3% rise represents the weakest full-year performance for national home prices since 2011, when prices declined 3.9%.
Godec pointed out that recent price trends fall well short of longer-run averages. Over the last decade, national home prices have increased at an average annual pace of 6.6%, placing 2025’s performance 5.3 percentage points below that benchmark. The data underscores how quickly the housing market has downshifted from the stronger appreciation seen earlier in the cycle.
Two key structural forces are identified as reshaping the housing market in recent years: mortgage rates and inflation. Godec highlighted that the 30-year mortgage rate finished 2025 at 6.2%, meaningfully higher than the 4.8% average of the past 10 years. The current level is also in sharp contrast to the 3.9% average rate that prevailed from 2016 through 2020, underscoring the degree to which borrowing costs have risen from the pre-pandemic period.
On the inflation side, Godec said annual inflation for 2025 came in at 2.7%, modestly below its own 10-year average of 3.1%. However, inflation still outpaced home-price appreciation by 1.4 percentage points, implying that real home values declined for many owners over the year. In effect, even as nominal prices edged higher, purchasing power and inflation-adjusted equity were eroded.
Performance also varied significantly by city. Chicago, New York, Cleveland and Minneapolis led major markets for home-price gains in 2025, according to the index data cited. In contrast, Tampa, Denver, Phoenix, Dallas and Miami experienced some of the steepest price declines among tracked markets. This split points to a clear regional divergence in how the housing adjustment is playing out.
Godec described this pattern as part of a broader reordering across the national housing landscape. He noted that historically steady markets in the Midwest and Northeast continued to outperform, while several Sun Belt markets that saw outsized price surges during the pandemic cycle have remained under pressure. Those Sun Belt cities are now extending their corrections as earlier gains are repriced, even as more mature, less volatile markets hold up comparatively better.
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