U.S. Home Price Growth Slows Again, Hitting Weakest Pace Since Mid-2023
U.S. home price growth continued to cool in September 2025, marking another month of weakening momentum as higher borrowing costs weighed heavily on housing demand. According to the latest S&P Cotality Case-Shiller Indices released by S&P Dow Jones Indices, national prices rose just 1.3% year over year, the slowest annual gain since the middle of 2023.
Nicholas Godec, CFA, CAIA, CIPM and Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, said the cooling trend is becoming more pronounced.
“Home price growth has slowed even further, slipping to a 1.3% annual increase in September the softest reading since mid-2023,” Godec explained. “This continues the gradual slide from August’s 1.4% gain and stands in stark contrast to the double-digit growth we saw after the pandemic.”
The slowdown is also significant when compared with inflation. September’s Consumer Price Index (CPI) ran 1.7 percentage points above home-price appreciation the widest gap between the two since they diverged earlier this year. That gap has expanded every month since June, showing how housing costs are cooling faster than broader consumer prices.
Regional Trends Show a Split Market
Godec noted that market performance now clearly varies by region.
Leading Cities (Annual Gains):
- Chicago: +5.5%
- New York: +5.2%
- Boston: +4.1%
These Northeastern and Midwestern markets have continued to show resilience even as national growth slows.
On the other side of the spectrum, several Sun Belt markets are seeing more pronounced declines:
Largest Annual Drops:
- Tampa: –4.1% (11th straight month of negative growth)
- Phoenix: –2.0%
- Dallas: –1.3%
- Miami: –1.3%
These metros had some of the fastest price increases during the pandemic and are now experiencing a more noticeable correction.
National Indexes Continue to Cool
The latest Case-Shiller data shows slowing growth across all major composites:
- National Index: +1.3% YoY (down from +1.4% in August)
- 10-City Composite: +2.0% YoY (down from +2.1%)
- 20-City Composite: +1.4% YoY (down from +1.6%)
On a monthly basis before seasonal adjustment, all 20 metros saw price declines. The steepest pullbacks were in:
- Tampa: –1.0%
- San Diego: –0.9%
- Seattle: –0.9%
Even after seasonal adjustment, the national index posted only a 0.2% monthly increase, while the 20-City Composite rose a modest 0.1%.
Godec said this across-the-board weakness reflects how mortgage rates near 6.3% in late September are finally slowing the market after years of tight supply masking demand-side pressures.
Six-Month Momentum Signals Further Softening
Looking at medium-term trends, national home prices have risen only 0.4% over the past six months. Once inflation is factored in, this essentially reflects a decline in real home values.
Only seven of the 20 tracked metros have seen any positive appreciation over the past half-year:
- Chicago
- Cleveland
- Minneapolis
- Boston
- New York
- Charlotte
- Atlanta
Most of the Sun Belt and Western metros showed six-month declines, reinforcing how these markets are feeling the sharpest impact from stretched affordability and rising financing costs.
Seasonally Adjusted Monthly Comparison
| Index | MoM (Not SA) | MoM (SA) | YoY |
|---|---|---|---|
| U.S. National | –0.3% | +0.2% | +1.3% |
| 10-City Composite | –0.5% | +0.2% | +2.0% |
| 20-City Composite | –0.5% | +0.1% | +1.4% |
Market Faces Persistent Headwinds Heading Into 2026
Godec said the latest data reflects the weakest annual growth in home prices since early 2023 when the market was absorbing the shock of the Federal Reserve’s rapid rate-hiking cycle. But this time, he said, conditions are different.
“Unlike the brief slowdown we saw in early 2023, today’s environment suggests more lasting challenges,” he noted. “With mortgage rates still high and affordability sitting near multi-decade lows, the market appears to be settling into a period of very slow price growth or even price declines in certain regions.”
With borrowing costs expected to remain elevated and inventory slowly rising, the housing market looks poised to move into 2026 with cooler momentum, continued price moderation, and increased regional variation. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
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