US Housing Market Stalls with Most Big Markets Below Peak, National Prices Rise Just 0.03%

US home prices are losing steam with annual nationwide price increase slowing to 1.3% in June, the slowest pace in two years. Most big markets are below peak, with 51 out of the top 100 markets now below peak and almost one-third have fallen at least a percentage point from recent highs. Persistently high mortgage rates and tight supply in many areas are contributing to the weakness in the housing market. Homeowners in some areas have seen an erosion of wealth, with median prices falling by over $100,000 from their peak.

US home prices are experiencing a notable slowdown, with the annual nationwide price increase slowing to 1.3% in June. This represents the slowest pace in two years, according to data from Intercontinental Exchange (ICE) [1]. The trend is particularly pronounced in major markets, with 51 out of the top 100 markets now below their peak, and almost one-third of these markets having fallen at least a percentage point from recent highs.

The cooling of the housing market is attributed to persistently high mortgage rates and tight supply conditions in many areas. High mortgage rates, currently hovering just below 7%, have made monthly payments unaffordable for many Americans, dampening housing demand [1]. While there has been an increase in homes available for sale in some regions, particularly in the South and West, supply remains tight in many markets [1].

The housing market's weakness is most evident in the condo market, where prices fell 1.4% year-on-year compared to a 1.6% rise for single-family homes. Nationally, prices rose just 0.03% from the previous month after seasonal adjustment, suggesting a propensity for further slowing [1].

Consumer sentiment around home buying has also taken a hit. The Fannie Mae's Home Purchase Sentiment Index (HPSI) fell 3.7 points to 69.8 in June, reflecting growing concerns about job stability, mortgage rates, and income gains [2]. Despite this pessimism, there was a slight improvement in attitudes toward buying a home, with the share of respondents who think it's a good time to buy increasing from 26% to 28% [2].

Leading economist Mark Zandi has issued a stark warning, upgrading his assessment of the U.S. housing market from a yellow flare to a red flare. This indicates major instability and the risk of a further downturn, which could significantly impact the broader economy [3]. Zandi's concerns are driven by persistently high mortgage rates and a slowdown in new construction activity and sales. Home sales in the U.S. were already "uber depressed" in May, with new single-family house sales dropping 13.7% month-on-month and 6.3% below the rate in May of last year [3].

In conclusion, the U.S. housing market is at a critical inflection point, with prices in many major markets below peak and consumer sentiment remaining fragile. The outlook for the housing market remains mixed, with the broader economic backdrop of heightened job insecurity and subdued income growth weighing on household optimism.

References:
[1] https://www.bloomberg.com/news/articles/2025-07-15/us-home-prices-are-losing-steam-with-most-big-markets-below-peak
[2] https://www.bluefieldgroup.com/blog/us-housing-sentiment-slips-in-june-amid-heightened-economic-concerns/
[3] https://www.newsweek.com/economist-housing-market-red-flare-warning-2099103