While prices increased year-over-year, the trend of slowing price growth continued in May
House price growth continued to slow in May, and even reverse in some markets, according to two major house pricing reports released Tuesday.
The FHFA House Price Index showed a 0.2% decline in home prices in May. Prices increased by 2.8% from May 2024 to May 2025.
Meanwhile, the S&P CoreLogic Case-Shiller Index showed a 2.3% annual gain in home prices, which was a decrease from the gain shown in April 2025. After seasonal adjustment, the national index posted a monthly decline of 0.3%.
The 10-City Composite saw an increase of 3.4% annually, down from the 4.1% bump in April. The 20-City Composite had a 2.8% annual increase, down from 3.4% in April. Both indexes fell 0.3% month over month.
Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, said the price increase was the smallest in almost two years.
“May’s data continued the year’s slow unwind of price momentum, with annual gains narrowing for a fourth consecutive month,” Godec said. “National home prices were just 2.3% higher than a year ago, the smallest increase since July 2023, and nearly all of that gain occurred in the most recent six months. The spring market lifted prices modestly, but not enough to suggest sustained acceleration.”
Regional numbers mixed
In the FHFA report, monthly home price changes ranged from a 0.8% decline in the Middle Atlantic division to a 0.3% increase in the West South Central and New England divisions. All regions showed an annual increase, from 0.6% in the Pacific division to 5.9% in the Middle Atlantic.
In the Case-Shiller index, New York reported the highest annual increase at 7.4%. Chicago saw a 6.1% increase, while Detroit’s annual home prices went up by 4.9%. Tampa saw the lowest return, falling by 2.4%.
“Regional results reflected the same narrowing pattern, but with stark geographic divergence,” Godec said. “New York retained the top spot with a 7.4% annual gain, followed by Chicago (6.1%) and Detroit (4.9%), continuing the Midwest and Northeast leadership that has defined 2025. At the other end of the spectrum, Tampa declined 2.4% year over year, marking its seventh consecutive month of annual declines.
“Several Western markets posted minimal or negative gains: Los Angeles rose just 1.1%, San Diego 0.4%, Phoenix 0.9%, and San Francisco turned negative at -0.6%, reflecting persistent weakness in markets that experienced the sharpest pandemic-era run-ups.”
High rates blamed
Monthly numbers showed broad price decreases in many metropolitan areas, as buyer hesitancy is keeping demand lower than expected.
“Monthly trends also signaled broad-based fatigue,” Godec said. “All three headline indices rose just 0.4% on a non-seasonally adjusted basis, the slowest monthly gain since January. After seasonal adjustment, each declined 0.3%, marking the third consecutive month of seasonally adjusted declines for the National Composite.
“Only four cities – Cleveland, Minneapolis, Charlotte, and Tampa – showed month-over-month acceleration, pointing to waning momentum breadth even as most cities still registered nominal gains.”
Dave Krueger, a mortgage broker at Montana Family Mortgage, describes the situation as "very difficult" for new buyers, with many being "pushed out of the market." https://t.co/c4xkwnCLUm
— Mortgage Professional America Magazine (@MPAMagazineUS) July 26, 2025
These reports were released one day before the Federal Reserve was set to announce its latest rate decision. All signs point to a continued hold from the central bank. Market volatility has kept mortgage rates elevated, which Godec believes is keeping home prices muted as well.
“Seasonal momentum is proving weaker than usual, and the slowdown is now more than just a story of higher mortgage rates,” Godec concluded. “It reflects a market recalibrating around tighter financial conditions, subdued transaction volumes, and increasingly local dynamics. With affordability still stretched and inventory constrained, national home prices are holding steady, but barely.”
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