First American data showed barely rising prices as regional gaps widened
National home price growth in the United States edged along in November as buyers and lenders operated in what one economist called a “new normal” of higher rates and strained affordability, according to the latest Home Price Index from First American Data & Analytics.
The firm’s non-seasonally adjusted index showed prices dipped 0.2% from October to November, while rising just 0.7% year over year – the fourth straight month of sub‑1% annual growth. National figures for September–October were revised down to a 0.3% monthly decline.
Market adjusts to ‘new normal’
“House price growth has stabilized in the low single digits as the market adjusts to a new normal for mortgage rates and a constrained affordability environment,” Mark Fleming, chief economist at First American, said.
“The new housing market normal is characterized by minimal price appreciation and, in some regions, outright decline. Slower price growth offers buyers a bit of affordability breathing room in near term, and with wage growth exceeding house price growth, affordability is poised to continue slowly improving.”
In an earlier 2025 outlook, First American research suggested affordability could see only a “modest 2 percent improvement in affordability by the end of the year,” even if mortgage rates eased and price growth moderated.
Rust Belt resilience, Sun Belt slide
Local results in November underlined a widening split between cheaper Rust Belt markets and once‑red‑hot Sun Belt metros.
“When it comes to house price appreciation, where the home is matters, as local market performance varies widely. Among the top 30 markets we track, markets with annual price declines outnumber markets with annual price growth,” Fleming said.
“In markets where potential first-time buyers can still find relatively affordable homes – including parts of the Midwest and Northeast, such as Pittsburgh and St. Louis – price resilience is more evident,” he said.
“But, in markets where affordability has been stretched, such as Miami and Denver, higher inventory combined with strained household budgets has contributed to falling prices.”
Pittsburgh led annual gains among major markets, with overall prices up 6.9%, followed by Warren, Mich. (5.4%), Newark (3.6%), New York (3.3%) and St. Louis (2.8%).
By contrast, Oakland posted a 6.9% annual decline, with Miami, Denver, Phoenix and Tampa also registering year‑over‑year drops.
Starter-tier homes showed particular resilience in some Rust Belt metros, with Pittsburgh’s entry‑level segment up 12.5% year over year, compared with much weaker luxury‑tier growth.
That pattern aligns with earlier First American findings in October – that appreciation remained “close to its slowest pace since 2012” as affordability headwinds bore down on rate‑sensitive starter and mid‑tier buyers.
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