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U.S. home prices are still on the rise, but the pace of growth is starting to ease, according to new data released Tuesday by S&P Dow Jones and the Federal Housing Finance Agency (FHFA).
Both the FHFA Housing Price Index (HPI) and the S&P CoreLogic Case-Shiller Indices posted a 3.9 annual increase in February. While that marks another year of gains, the data shows that price growth has moderated from the rapid increase seen in previous years.
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On a monthly basis, the FHFA HPI recorded a modest 0.1 percent uptick in February, while January’s figure was revised upward to a 0.3 percent gain.
Regionally, the Middle Atlantic division stood out with a robust 7.0 percent year-over-year increase, while the Pacific region saw the slowest growth at just 0.9 percent. The S&P CoreLogic Case-Shiller Indices offered a similar picture.
Among the 20 metro areas it tracks, New York (7.7 percent), Chicago (7.0 percent) and Cleveland (6.6 percent) led the way in annual appreciation. At the other end of the spectrum, Tampa recorded a 1.5 percent decline.
While 17 out of 20 metro areas posted yearly gains, several Sun Belt markets, including Tampa, Miami and Charlotte showed flat or negative growth– underscoring shifting dynamics in regions that had previously seen rapid price increases.
Nicholas Godec | Head of Fixed Income Tradables & Commodities at
S&P Dow Jones Indices
“Even with mortgage rates remaining in the mid-6 percent range and affordability challenges lingering, home prices have shown notable resilience,” Nicholas Godec, S&P Dow Jones Indices’ head of fixed income tradables and commodities, said in a statement.
While mortgage rates have pulled back from their peak, they are still hovering in the mid-6 percent range, keeping monthly payments historically high relative to household incomes. That’s taking a toll on buyer demand.
Yet even as demand cools, supply remains constrained. Many homeowners are staying put, reluctant to give up low mortgage rates locked in during the pandemic. Economic uncertainty as a result of the Trump administrative tariff policies are also keeping consumers in place.
A recent Inman-Dig Insights consumer survey showed that among 3,000 Americans polled, 70 percent believe now is a bad time to buy a home. The resulting inventory shortage is helping to prop up home values in many areas.
“Rather than broad declines, we are seeing a slower, more sustainable pace of price growth,” Godec said.
The national number reflect this transition. TheU.S. National Composite Index showed a 0.3 percent monthly increase and a 3.9 percent annual gain. But much of that appreciation came earlier in the year with recent months showing a flatter trend — a sign the market is settling into a more measured rhythm after years of volatility.
