Annual price growth eases amid widening regional gaps
United States house prices ticked up 0.4% in August, according to the latest Federal Housing Finance Agency (FHFA) House Price Index (HPI) report.
Over the past year, prices climbed 2.3% nationally, a marked slowdown from the previous 12 months, when annual growth reached 4.6%. The FHFA revised July’s previously reported 0.1% dip to flat, underscoring the market’s recent stability.
Regional divergence was pronounced. The Middle Atlantic division led the nation with a 1.2% monthly increase and a 6.3% annual gain, while the Pacific division saw prices fall 0.8% in August and drop 0.6% over the year.
The South Atlantic and New England regions also posted solid gains, while the West South Central and Pacific divisions lagged.
The FHFA HPI, based on tens of millions of home sales dating back to the 1970s, is widely regarded as a bellwether for single-family home values. The index uses a repeat-sales methodology and draws on data from Fannie Mae and Freddie Mac, providing a granular view of price trends at the national, regional, and local levels.
Broader market conditions changed in 2025. Existing-home sales rose 1.5% in September to a seasonally adjusted annual rate of 4.06 million, according to the National Association of Realtors. However, affordability remained a concern.
Inventory also remained tight. September’s 1.55 million homes for sale equaled a 4.6-month supply, slightly higher than the 4.2 months available a year earlier.
Higher house prices could sideline some prospective home buyers despite declining mortgage rates. The average 30-year fixed mortgage rate stood at 6.19% in late October, down from a January peak of 7.04%, but demand for purchase loans has not rebounded in step.
The FHFA’s data suggest that, while price growth has moderated, the market remains competitive in many regions.
The next FHFA HPI report on November 25 will provide data through September and the third quarter, offering further insight into whether the current pattern of regional divergence will persist.
Meanwhile, Fannie Mae’s latest Home Price Index (FNM-HPI) showed US single-family home prices climbing 3.3% year over year in the third quarter of 2025. Fannie Mae’s Economic and Strategic Research (ESR) group now expects home price growth to be 2.5% in 2025 and 1.3% in 2026 on a Q4/Q4 basis, compared to 2.8% and 1.1% in their prior forecast.
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