One economist said new figures showed house prices in 2025 had the “weakest start to the year since the early 2010s”.
The S&P Cotality Case-Shiller Index continued to slow in January, rising just 0.9% annually, its weakest start in more than a decade.
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The national home price NSA index in January fell 0.2 percentage points from December. Inflation outpaced house price growth for eight consecutive months, with the consumer price index reaching 2.4%. The NSA index rose 2.2% annually in the first two quarters of 2025, but fell 1.3% in the following two quarters. Annual home price trends by metro area continued to diverge, with Eastern and Midwest markets such as New York (+4.9%), Chicago (+4.6%), and Cleveland (+3.6%) leading growth. Meanwhile, prices continued to fall (-2.5%) in Tampa, a once booming market.
Nicholas Godek
“The inflation comparisons support that trend,” Nicholas Godek, CFA, CAIA, CIPM, head of fixed income trading products and products at S&P Dow Jones Indices, said Tuesday. “In real terms, home values have fallen slightly over the past year.”
“Geographical leadership remains narrow,” he added. “Monthly price changes were slightly negative before seasonal adjustment and slightly positive after adjustment. This is consistent with the market neither recovering nor sharply adjusting. With 30-year mortgage rates still near 6%, affordability constraints show no signs of easing. Nominal prices have increased little, but in real terms they have been creeping down.”
Lisa Sturtevant, chief economist at Bright MLS, said macroeconomic and geopolitical headwinds continue to complicate the housing market as mortgage rates rise due to the escalating Iran conflict. However, homebuyers may still find opportunities by seeking concessions to offset the impact of rising interest rates.
Dr. Lisa Sturtevant
“Today’s report shows a continuation of the modest upward trend seen at the end of 2025, with house prices having their weakest start to the year since the early 2010s,” he said. “Affordability remains a major constraint in the housing market. Potential buyers are looking forward to both lower interest rates and slower price growth, and are increasingly seeking concessions from sellers, resulting in a more balanced negotiating environment between buyers and sellers.”
Sturtevant said the immediate outlook “remains uncertain” as inventory shortages continue to push up home prices despite slowing demand. “While there have been encouraging signs of improving affordability, rising interest rates and heightened uncertainty are creating headwinds for the market,” he said.
Bankrate financial analyst Stephen Cates said homebuyers may be tempted to press pause this spring, but now is the time for agents to remind consumers that building wealth is a long-term game.
“While this year feels like a stagnation, decades-long trends show that suburban homeownership remains a powerful tool for building long-term wealth,” he said in an emailed statement. “Homeowners should not be discouraged by a year of slow growth. Home values nationwide have risen more than 300 percent since tracking began in the first quarter of 1991, according to data from the Federal Housing Finance Agency.”
“Homeownership is a long-term commitment and short-term fluctuations should be measured, but not agonized over,” he added. “Despite the slow pace of growth, the housing market remains a pillar of stability, supported by trillions of dollars in government support funding. Prospective homebuyers with stable living situations should still view ownership as a lucrative opportunity as affordability improves in the coming years.”
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