June Year-Over-Year Home Price Appreciation Slows To 1.9%

Summer started sluggish for the housing market. Persistently high mortgage rates, historically low inventory, and broader macroeconomic uncertainty weighed on both buyers and sellers. Sellers remain hesitant to list due to elevated interest rates while buyers are cautious amid concerns over job security.

Even as inventory increases in some areas, the reluctance of buyers to bid and buy could lead to price declines if external pressures force sellers to act. With no clear path to balance buyer and seller needs, both sales and prices are expected to remain subdued through year-end.

The S&P Cotality Case-Shiller Index rose 1.9% year over year in June, continuing its deceleration from 6.5% at the start of 2024 (Figure 1). This slowdown is expected to persist, and nationwide price declines are increasingly likely. Already, when accounting for inflation, prices fell. The index appreciated less than the overall U.S. inflation rate of 2.7%.

On a non-seasonally adjusted basis, the index rose just 0.1% month over month in June. A monthly increase above 1% hasn’t occurred since April 2024, and June’s increase is well below the average 0.8% June increase recorded between 2015 and 2019 (Figure 2).

The 10-city and 20-city composite indexes posted monthly declines for the first time in 2025 although annual growth remained positive at 2.6% and 2.1%, respectively. These figures are less than one-third of their early 2024 peaks — 8.3% for the 10-city composite index and 7.5% for the 20-city composite index — and are far below the 15–20% growth rates seen in 2021 and early 2022.

Since 2005, the national index has risen 93%, the 10-city composite is up 74%, and the 20-city composite has grown 80%. Most of this growth occurred in the past five years when the three indexes increased more than 50%. However, strong inflation, which jumped up 24% over the past five years and 66% over the past 20 years, has tempered these gains.

“Home price growth slowed down in June to 1.9% annually, but the market is sharply bifurcated by geography,” said Cotality Principal Economist Thom Malone. “The Northeast and Midwest are posting robust annual price gains like 7% in New York City and 6.1% in Chicago. Meanwhile, Sun Belt and Western metros, including Tampa, Dallas, San Francisco, and Denver, are seeing price declines. Affordability remains strongest in the Midwest, where lower prices offer buyers a foothold. In the South and the West, a hangover from pandemic-era appreciation remains, and rising insurance premiums are contributing to price declines in those regions.”