United States home price growth slowed slightly in December as mortgage and inflation rates weighed on housing values.
Prices were up 1.3% in the year to December, compared with 1.4% annual growth in November, according to the S&P Cotality Case-Shiller index. Across 2025, home prices rose by the smallest percentage since 2011.
“Two structural forces have reshaped the market over recent years: mortgage rates and inflation,” said S&P Dow Jones Indices head of Fixed Income Tradables & Commodities Nicholas Godec.
"The 30-year mortgage rate closed 2025 at 6.2%, well above the 4.8% 10-year average and a sharp contrast to the 3.9% average that prevailed from 2016 through 2020. Meanwhile, annual inflation for 2025 came in at 2.7% — modestly below the 3.1% 10-year average — but still outpaced home price appreciation by 1.4 percentage points, effectively eroding real home values for most owners.”
On a monthly basis, national housing prices rose by 0.4%, the same percentage increase as in November. S&P’s 20-city composite index was up 0.5%.
While prices gained 2.6% in the first half of 2025, the second half saw nominal declines of 1.3%, according to the Godec. December’s 20-city composite index lifted 1.4%, in line with November.
Chicago reported the largest annual price increases at 5.3%, followed by New York City and Cleveland. Tampa and Denver posted the greatest declines, at 2.9% and 2.1% respectively.
“Looking ahead, the path for home prices will depend heavily on spring supply dynamics. A sustainable housing recovery requires both renewed buyer demand and a meaningful increase in fresh listings,” wrote Realtor.com senior economist Anthony Smith.
Supply has flagged in recent months, however. New single-family housing inventory dropped 2.7% month-over-month in December, per the U.S. Census Bureau.
“As a result, national home price appreciation is likely to persist, though at a tempered pace and increasingly shaped by local inventory conditions rather than broad macro momentum,” Smith wrote.
