Home Values Stabilize Nationally but Continue To Fall in South and West

National growth in home values stabilized this fall as mortgage rates dropped, but major metros in the South and West continued to see declines, according to a key home price index.

Nationally, the value of single-family homes as measured by repeat transactions rose 1.4% in October compared to a year earlier, according to data from the S&P Cotality Case-Shiller Index released on Tuesday.

The October gain was up slightly from the 1.3% annual growth seen in September. But 16 of the 20 markets tracked in the index declined month-over-month in October, signaling broad price stagnation.

“October’s data show the housing market settling into a much slower gear," says Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. “Short-term momentum has essentially stalled."

Among the 20 major metros tracked by Case-Shiller, home values fell on an annual basis in 10 of those places, all located in the South and West. Tampa, FL, and Phoenix continued to see the largest year-over-year declines in home prices, with prices falling 4.17% and 1.54%, respectively.

Meanwhile, Chicago saw the biggest annual home prices gain at 5.83%, followed by New York City at 4.95%, signaling unusual continued strength in the Northeast and Midwest.

"These traditionally stable Midwestern and Northeastern metros have sustained solid growth even as broader conditions soften," says Godec. "It’s a stark reversal from the pandemic boom, as the markets that were once ‘pandemic darlings’ are now seeing the sharpest corrections while more traditional metros continue to post modest gains."

Softer mortgage rates may have helped stabilize the market, with the 30-year fixed rate averaging 6.25% in October, the lowest monthly average in more than a year.

Consequently, existing-home sales rose nationally in October despite disruption from the government shutdown, with closings up 1.2% from September and gaining 1.7% from a year earlier.

Despite the uptick, the housing market remains on track to hit a new 30-year low in home sales in 2025, as affordability concerns and economic uncertainty sideline many prospective buyers.

"Momentum in the housing market is struggling to pick up as affordability constraints and a softening labor market weigh on demand," says Realtor.com® Senior Economist Joel Berner. "Recent housing activity suggests that modest improvements in demand are emerging, though, supported by lower mortgage rates and seasonally favorable conditions."

Home values as measured by Case-Shiller are also continuing to grow more slowly than overall inflation, signaling that prices are falling in real dollars.

October's 1.4% annual gain in home prices remained well below the 3% inflation rate in the Consumer Price Index for September. (October inflation data is missing due to the government shutdown.)

Still, mortgage rates have remained stubbornly above 6% for the past three years, which, combined with record-high home prices, have prices many buyers out of the market.

"Would-be buyers are facing the highest borrowing costs in decades, and that affordability squeeze has curbed demand enough to erode price momentum across most of the country," says Godec.

Looking ahead, the Realtor.com economic research team's national housing forecast projects that mortgage rates will remain near their current levels in 2026, offering incremental relief but not enough to unlock a sharp rebound in buying activity.

"As a result, home price growth is likely to continue decelerating nationally, with outcomes increasingly determined by local inventory conditions," says Berner.

The Case-Shiller Index reports on a two-month delay and reflects a three-month moving average of home sales prices.

Homes usually go under contract a month or two before they close, so the October data primarily reflects purchase decisions made in the summer.

Although the Index's price data is delayed by several months, it is considered one of the best available measures of changing home values, because it is based on repeat transactions on the same properties.