Home prices are still rising, but June numbers mark ‘a decisive shift’ in the housing market

Home-price growth continued to slow in June, however home prices continue to rise year-over-year in the majority of large U.S. metropolitan areas, according to the S&P Cotality Case Shiller Home Price Index released Tuesday. 

In June, the national index rose 1.9% year-over-year to a reading of 331.52. This is down from an annual 2.3% increase recorded in May, and the slowest pace recorded since the summer of 2023. Month-over-month the national index was down -0.3% after season adjustment.

Nicholas Godec, the head of fixed income tradables & commodities at S&P Dow Jones Indices, said June’s numbers “mark the continuation of a decisive shift in the housing market.”

“What makes this deceleration particularly noteworthy is the underlying pattern: The modest 1.9% annual gain masks significant volatility, with the first half of the period showing declining prices (-0.6%) that were more than offset by a 2.5% surge in the most recent six months, suggesting the housing market experienced a meaningful inflection point around the start of 2025,” Godec said in a statement.

“For the first time in years, home prices are failing to keep pace with broader inflation. From June 2024 to June 2025, the Consumer Price Index climbed 2.7%, substantially outpacing the 1.9% gain in national home prices. This reversal is historically significant: During the pandemic surge, home values were climbing at double-digit annual rates that far exceeded inflation, building substantial real wealth for homeowners. Now, American housing wealth has actually declined in inflation-adjusted terms over the past year — a notable erosion that reflects the market’s new equilibrium.”

The 10-city composite index also recorded a yearly increase in June, rising 2.6% from a year ago to a reading for 362.65. However, this annual increase is down from a 3.4% annual jump in May. The same trends continued for the 20-city index, which rose 2.1% annually in June, down from a 2.8% jump in May, with the index coming in at a reading of 342.90.

On a monthly basis, the 10-city and 20-city indexes both recorded decreases of -0.1% and -0.3%, respectively, after seasonal adjustment.

New York again topped the list with the highest annual price gain among the 20 cities, rising 7.0% annually in June. Chicago also made another appearance in the top-three with an annual price gain of 6.1%, while Cleveland snuck into the top, dethroning Detroit, with its annual price gain of 4.5%. Tampa, once a star of the Case Shiller Index, had the worst performance among the 20 cities, recording a 2.4% annual price decrease for the second month in a row.

Other metros that recorded annual price decrease in June include Dallas (-0.95%), Denver (-0.55%), Miami (-0.25%), Phoenix (-0.06%), San Diego (-0.61%), and San Francisco (-1.98%).

As Godec looks ahead, the transition from rapid price growth in the Sun Belt to home-price growth in more industrial areas is a positive sign for the overall stability of the national housing market.

“The regional rotation from Sun Belt to traditional industrial centers likely reflects more sustainable fundamentals — employment growth, relative affordability, and demographic shifts that favor established metros over speculative markets,” he said. “While this represents a loss of the extraordinary gains homeowners enjoyed from 2020-2022, it may signal a healthier long-term trajectory where housing appreciation aligns more closely with broader economic fundamentals than speculative excess.”

Bright MLS chief economist Lisa Sturtevant agrees that this slower home price growth is, in theory, good news.

“Slower price growth coupled with a slight drop in mortgage rates will improve affordability and create a window for some buyers to get into the market,” she said in a statement. “But how many people will actually make an offer on a home and how many will continue to wait for more favorable conditions?”