Home price growth drops to lowest level in two years

Home prices are continuing to rise, but at a much slower pace. Home prices rose 1.7% nationwide in July, according to the S&P Cotality Case-Shiller Index released Tuesday.

This pace is slower than the 1.9% annual growth recorded in June and marks the slowest pace of annual home price appreciation since July 2023. In comparison, consumer prices rose 2.7% during the same time period.

“July’s results reinforce that the housing market has downshifted to a much slower gear,” Nicholas Godec, the Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices, said in a statement. “U.S. home values have essentially stagnated after inflation, marking the third straight month of real housing wealth decline for homeowners. This reversal is striking: during the pandemic boom, home prices were climbing far faster than inflation, rapidly boosting homeowners’ real equity. Now, the situation has flipped – over the last year, owning a home yielded a modest nominal gain, but an inflation-adjusted loss.”

Both the 10-city and 20-city composite indexes also showed slower annual home price growth, with the 10-city dropping from 2.7% in June to 2.3% in July and the 20-city falling from 2.2% in June to 1.8% in July. In July, the indexes came in at readings of 361.64 for the 10-city and 341.95 for the 20-city.

According to Godec, what is keeping price growth narrowly in the positive territory is the rebound that occurred earlier this year after the relative weakness of late 2024.

“What’s keeping price growth barely in positive territory at all is the rebound we saw earlier in 2025 offsetting a soft patch in late 2024. National home prices edged down slightly last autumn and then crept back up in the first half of this year,” he said. “Essentially, the market experienced a minor dip and recovery within a 12-month span, leaving us with little overall appreciation. This kind of volatile plateau stands in stark contrast to the roaring price surges of 2021, and it underscores just how decisively the market’s momentum has cooled.”

New York continues to dominate the list, again claiming the title of highest annual price gain among the 20 cities examined with a 6.4% annual increase in July. The top-three was rounded out by Chicago (6.2%) and Cleveland (4.5%). Tampa, which once dominated the list, recorded the lowest return, with prices falling 2.8% year-over-year in the Sunshine State metro. San Francisco (-1.92%), Miami (-1.3%), Dallas (-1.25%), Phoenix (-0.9%), San Diego (-0.66%) and Denver (-0.63%) all recorded yearly price declines.

“This represents a near-total inversion of the pandemic’s winners and losers – the regions that were once laggards are now leading, while the former high-flyers are lagging or even declining,” Godec said. “Importantly, this rotation seems rooted in fundamentals: the markets now on top (like Chicago or Cleveland) tend to be more affordable and supported by steady local economies, whereas the ones stumbling (like San Francisco or Phoenix) are grappling with stretched affordability and the comedown from speculative fervor.”

While home price growth may be cooling, Lisa Sturtevant, the chief economist at Bright MLS, noted that the pace of price appreciation recorded over the past few years is unsustainable.

“The Case-Shiller Index shows that home prices have risen by more than 50% over the past five years. High home prices have priced many buyers out of the market,” Sturtevant said in a statement. “Over the past few months, home sales have been driven by buyers at the higher end of the market, as those buyers are feeling more economically secure than more moderate-income buyers.”

If consumers would like to see more home price moderation, Sturtevant says there will need to be an increase in housing inventory.

“As sellers adjust their price expectations, we should see continued downward pressure on price growth—and even home prices falling in more markets — which will be necessary to move toward a more balanced housing market,” she said.