The S&P Cotality Case-Shiller Index reported home price gains of 1.9 percent while the FHFA reported nationwide home price gains of 2.9 percent. Inflation sits at 2.7 percent, which still leaves consumers in a sticky situation.
Home prices in the U.S. saw modest annual gains during the month of June and during the second quarter of the year, but were not enough to match inflation, with which consumers are currently grappling.
According to data released by the U.S. Federal Housing Finance Agency on Tuesday, home prices in the U.S. rose 2.9 percent between Q2 2024 and Q2 2025 but remained flat between the first and second quarters of 2025.
Meanwhile, according to the S&P Cotality Case-Shiller Index (formerly known as the S&P CoreLogic Case-Shiller Index) released on Tuesday, national home prices increased by 1.9 percent year over year in June. This was the slowest pace the index hit in the last two years.
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Still, those gains remain against a backdrop of 2.7 percent consumer inflation, which is just under the gains reported by the FHFA and well above those reported by S&P Dow Jones.
“What makes this deceleration [in home prices] particularly noteworthy is the underlying pattern,” Nicholas Godec, CFA, CAIA, CIPM, head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, said in a statement. “The modest 1.9 percent annual gain masks significant volatility, with the first half of the period showing declining prices (-0.6 percent) that were more than offset by a 2.5 percent surge in the most recent six months, suggesting the housing market experienced a meaningful inflection point around the start of 2025.”
This month’s findings also mark the first time in years that home prices have not kept in line with inflation, Godec added.
“From June 2024 to June 2025, the Consumer Price Index climbed 2.7 percent, substantially outpacing the 1.9 percent gain in national home prices. This reversal is historically significant: During the pandemic surge, home values were climbing at double-digit annual rates that far exceeded inflation, building substantial real wealth for homeowners. Now, American housing wealth has actually declined in inflation-adjusted terms over the past year — a notable erosion that reflects the market’s new equilibrium.”
The 20-City Composite saw annual growth of 2.1 percent and the 10-City Composite saw annual growth of 2.6 percent, according to Cotality. Meanwhile, cities that had previously seen strong growth during the pandemic hit a reversal, including Tampa, Florida, where prices dropped 2.4 percent on an annual basis, and Phoenix, Arizona, where prices dipped 0.1 percent annually. New York reported the highest gain with a 7 percent annual increase, and Chicago was not far behind at a 6.1 percent annual increase.
Home prices rose in 81 out of the 100 largest metro areas during the last year, FHFA reported. The greatest annual price increase was in Rochester, New York, where prices rose by 10.3 percent in the past year. North Port-Bradenton-Sarasota, Florida, saw the largest annual decline in prices at 11.2 percent.
By region, the Middle Atlantic division saw the greatest price appreciation, with a 6.7 percent increase from Q2 2024 to Q2 2025. The Pacific division saw the slightest increase during this period, with price appreciation at just 0.9 percent.
Slower home price growth and the recent drop in mortgage rates may spur more buyers to enter the market, but it’s unclear how many will continue to hold out for even better conditions, Bright MLS Chief Economist Lisa Sturtevant said in a statement emailed to Inman.
“Inventory has continued to rise, surpassing pre-pandemic levels in some markets,” Sturtevant said. “As a result, expect the Case-Shiller Home Price Index to show decelerating home price growth and even year-over-year price drops in some markets this fall. Buyers will have more leverage in many, but not all, markets. Sellers will need to adjust price expectations to reflect the transitioning market.”
Email Lillian Dickerson