US Home Prices Record Slowest Annual Gain in Two Years Amid Mortgage Rate Pressures

The S&P CoreLogic Case-Shiller US National Home Price Index reported a 2.7% annual gain in April 2025, the slowest since mid-2023. New York led regional growth with a 7.9% annual gain, while Tampa and Dallas faced declines. Nationally, the index showed a 0.4% monthly decline after adjusting for seasonal factors, indicating weaker market conditions. Housing market challenges include high mortgage rates and affordability constraints, but limited supply provides some price support.

The S&P CoreLogic Case-Shiller US National Home Price Index reported a 2.7% annual gain in April 2025, marking the slowest year-over-year appreciation since mid-2023 [1]. Nationally, the index showed a 0.4% monthly decline after adjusting for seasonal factors, indicating weaker market conditions. This trend reflects a broader housing market transition characterized by decelerating growth and shifting regional leadership.

Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, noted that the housing market continued its gradual deceleration in April. "What's particularly striking is how this cycle has reshuffled regional leadership—markets that were pandemic darlings are now lagging, while historically steady performers in the Midwest and Northeast are setting the pace," Godec said [1].

Among the 20 cities tracked, New York led regional growth with a 7.9% annual gain, followed by Chicago and Detroit with 6.0% and 5.5% annual increases, respectively. Conversely, Tampa and Dallas faced declines, with Tampa posting a 2.2% annual decrease and Dallas turning negative at -0.2% [1].

The monthly performance showed continued seasonal strength but with notable cooling from March's peak. After seasonal adjustment, the National Index declined 0.4%, suggesting that April's 0.6% raw gain was weaker than typical spring patterns would predict [1]. This divergence between raw and seasonally adjusted figures hints that the market's seasonal rhythms may be dampening as affordability pressures intensify.

Challenges in the housing market include high mortgage rates and affordability constraints, with rates sustaining their mid-6% range throughout April. However, housing supply remains severely constrained, with existing homeowners reluctant to surrender their sub-4% pandemic-era rates and new construction failing to meet demand. This supply-demand imbalance continues to provide a price floor, preventing sharp corrections [1].

Godec concluded, "We're witnessing a housing market in transition. The era of broad-based, rapid price appreciation appears over, replaced by a more selective environment where local fundamentals matter more than national trends. For investors and policymakers alike, this shift toward geographic divergence and moderate growth may actually represent a healthier, more sustainable trajectory than the unsustainable boom we experienced just a few years ago" [1].

References:

[1] https://finance.yahoo.com/news/april-home-prices-fall-sequentially-180047117.html