What does the data show?
The S&P Cotality Case-Shiller Home Price Index showed continued year-over-year home price growth through November, but at a moderating pace as affordability constraints and a slower labor backdrop weighed on demand. The U.S. National Index posted a 1.4% annual gain in November, unchanged from October and close to the slowest pace since mid-2023. This month’s release reflects sales closing primarily from September through November, a period when mortgage rates hovered in the low-6% range after staying above 6.5% until mid-September. That rate relief likely helped stabilize buyer sentiment into the fall, though rate lock-in and elevated prices continued to limit overall market turnover.
Recent housing activity suggests demand is improving only modestly. Existing-home sales rose slightly in November to 4.13 million, a 0.5% monthly increase, but remained down 1% year-over-year, underscoring that activity is stabilizing from a low base rather than rebounding. Pending home sales rose in November (up 3.3% month-over-month), drawing in buyers aiming to close before year-end. Even so, pricing momentum has continued to cool, aligning with a market where buyers are more payment-sensitive and sellers are increasingly tested on list-price expectations.
How did trends vary by region?
Regional price trends remained highly fragmented, with local inventory conditions continuing to drive divergence across metros. Northeast and Midwest markets, including Chicago (+5.7%) and New York (+5.0%), outperformed again, supported by tighter resale supply and fewer price cuts. Cleveland (+3.4%) also posted solid gains. By contrast, many South and West metros, including Tampa (-3.9%), Phoenix (-1.4%), Dallas (-1.4%), and Miami (-1.0%), saw year-over-year declines as inventory recovery and new-construction competition gave buyers more leverage and kept incentives common.
What is ahead for housing?
Broader economic conditions add nuance to the outlook. November CPI showed inflation continuing to cool, easing pressure on monetary policy and helping keep mortgage rates below year-ago levels, while labor market conditions have softened, weighing on confidence. Together, these forces point to a market that can sustain positive annual price growth, but with less upside than earlier in the cycle and a heavier dependence on local supply constraints.
Looking ahead, mortgage rates are expected to remain near current levels into early 2026, offering incremental affordability relief, but not enough to unlock a sharp rebound in activity. As a result, national home price growth is likely to continue decelerating, with markets that remain supply-constrained posting firmer gains while regions with rebuilding inventory face more ongoing price pressure as the market works toward a more balanced footing.
