S&P Global, the Federal Housing Finance Agency and Redfin all released housing-related reports on Tuesday highlighting price trends and the market’s struggle to settle into a new normal.
The housing market is riddled with mines, and homebuyers are on edge, hoping that, if the real estate gods are especially benevolent, they’ll be lucky to find the right property at the right price during a week when mortgage rates have eased enough to boost purchasing power.
The S&P CoreLogic Case-Shiller Index and the Federal Housing Finance Agency (FHFA) Home Price Index were both released on Tuesday, highlighting the market’s struggle with regulation amid multiple headwinds.
According to the Case-Shiller index in December, home prices rose 1.3% from the same month last year, slowing from November’s annual growth rate of 1.4%. House prices for all of 2025 rose only 1.3% year-on-year, the slowest growth since 2011, when prices fell 3.9%. This year’s performance is lower than the average growth rate of 6.6% over the past 10 years. Real house price returns were negative in the second half of the year as annual inflation outpaced house price growth by 2.7%. FHFA’s HPI is a little brighter, with U.S. home prices up 1.8% year over year in the fourth quarter. However, on a month-over-month basis, home prices were barely able to push gains, rising just 0.1% from November to December, FHFA said. Home prices rose in 41 of the 50 states in the fourth quarter, led by North Dakota (up 6.4%), Delaware (up 6.3%), Illinois (up 6.1%), Wisconsin (up 5.7%) and Michigan (up 5.5%).
Anthony Smith | Realtor.com
Commenting on the Case-Shiller results, Anthony Smith, senior economist at Realtor.com, said price trends “represent a clear downward shift from the post-pandemic pace” and “highlight how affordability constraints and historically low closing rates weighed on housing momentum throughout the year.”
“Recent housing activity does not suggest a broad recovery and highlights that stabilization is coming from a low base,” he said in an email to Inman. “Recent housing activity does not suggest a broad recovery and highlights that stabilization is coming from a low base. Existing home sales in 2025 will be just 4,063,000, the lowest annual level since 1995, reflecting continued interest rate lock-in.” “At the same time, national inventories have more than doubled since the start of 2022, but price levels remain resilient. Longer days on market and increased delistings, rather than widespread price declines, explain much of this resilience.”
“In many cases, sellers appear willing to delist rather than substantially resetting price expectations to avoid strong downward pressure on supply,” he added.
Homebuyers are also pulling out in record numbers, with 40,000 home sales contracts canceled in January, according to Redfin on Tuesday. This represented 13.7% of homes that went under contract in the month, and was the highest share in January since Redfin began tracking this metric in 2017.
Cancellations were most common in buyer-leaning markets, including San Antonio (21.2%), Atlanta (18.5%) and Cleveland (17.9%). Riverside, California (17.5%) and Orlando, Florida (17.3%).
“Sales are falling at a higher rate than ever before, largely because there are hundreds of thousands more home sellers in the U.S. than buyers, making it a buyer’s market,” the report said. “This gives buyers the power to negotiate. If they find a home they like better or have inspection issues, they may back out of the purchase during the inspection period.”
“Financial uncertainty is another major reason why buyers exit deals,” he added. “While housing costs have come down from their peak, they remain near historic highs. Some prospective buyers are canceling their home purchases because of concerns about layoffs, tariffs, and geopolitical tensions.”
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