Compass Realty Signs are posted in front of your home for sale on June 23, 2025 in Greenbray, California.
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Increased supply and slower demand in the housing market ultimately cools prices and accelerates weaknesses.
Home prices rose just 2.7% in April compared to the previous year, according to the S&P CoreLogic Case-Shiller Index, released Tuesday. This is the lowest profit in nearly two years, down from an annual increase of 3.4% in March.
The report is slightly in the background as it runs the average price average for the three months that ended in April. More other reads in the market, such as those from Parcl Labs, show prices are flatter nationwide compared to a year ago.
S&P Case-Shiller found that slowing prices entrenched index measurements of composite materials in 10 and 20 cities. Both are well below their recent peaks. Furthermore, much of the annual increase in reading in April occurred in the past six months. In other words, prices were raised from the spring market rather than appearing throughout the year.
“What’s particularly impressive is how this cycle has reshuffled regional leadership, with markets that were pandemic darling behind, but historically steady performers in the Midwest and Northeast have set the pace.
New York saw its biggest price rise with profits of 7.9% per year, followed by Chicago at 6% and Detroit at 5.5%. This is a shift from the first year of the pandemic, when the Sunbelt saw a big demand and a big price rise.
Prices at previous hot markets are currently declining. Both Tampa, Florida and Dallas fell by 2.2% and 0.2%, respectively. Prices in San Francisco were essentially flat, with both Phoenix and Miami making profits of over 1%.
The high mortgage rate, which shot over 7% in April and has since settled just below that mark, maintains monthly payments near generational highs, price buyers, especially first time pools. Its share fell to just 30% of sales in May, according to the National Association of Realtors. First-time buyers historically account for 40% of the market.
The supply of homes for sale has risen sharply, but is still below pre-pandemic levels. According to a new report from Redfin, there is a risk that only 6% of sellers are lost. It’s slightly higher than a year ago, but it’s still historically low.
Prices are certainly weaker, but they are not close to the risk of a massive decline that was last seen following the subprime mortgage crisis and the Great Recession over a decade ago.
“Housing supply remains severely constrained and existing homeowners are reluctant to fail to meet sub-4% pandemic-era fees and demand. This supply-demand imbalance continues to provide price floors and prevent the sharp fix that some people have feared,” Godec said.
