Chicago and New York Lead in Home Value Growth as Prices Remain Sluggish Nationwide

National home value growth picked up slightly in May, led by gains in supply-constrained, high-demand metros in the Midwest and Northeast, while the West continued struggling.

The value of single-family homes as measured by repeat transactions rose 1.1% nationally in May compared to a year ago, up from a 0.9% annual uptick the month prior, according to data from the S&P Cotality Case-Shiller Index released Tuesday.

Among the 20 cities tracked by the index, Chicago led the nation for the third straight month with a 6.9% annual gain, followed once again by New York (4.2%) and Cleveland (3.1%).

Nationally, home values continued to decline in real terms in May as inflation climbed to 4.2%—its highest level in over three years—outpacing the national home price gain for the 12th consecutive month.

"Even on a nominal basis, the market remains noticeably weaker than a year ago," says Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices. "In May 2025, the National Home Price Index was up 2.4% year over year."

Fragmented market

On the other hand, Las Vegas posted May's largest decline, falling 1.9% year over year, with Seattle (-1.8%), Denver(-1.8%), and Tampa, FL (-1.6%) also registering significant losses.

"The geographic dispersion of home price trends continues to persist," says Kaufman. "While major metropolitan areas in the Northeast and Midwest recorded year-over-year gains exceeding the national average, many metropolitan areas in the West and Sunbelt regions remain under pressure."

Nearly 9 percentage points separate May's top-performing market from its weakest counterpart, highlighting a stark regional divergence in price trends.

"This divergence may reflect shifting post-pandemic housing dynamics, including a growing return-to-office mandate that appears to be supporting traditional urban markets," suggests Kaufman.

Realtor.com® senior economist Anthony Smith argues that the main reason Northeastern and Midwestern metros continue outperforming the rest of the U.S. is because these areas have tight resale supply and limited new construction.

"By contrast, Sun Belt and Mountain West markets, where inventory has rebuilt more quickly, continue to face pressure from both resale supply and new construction competition," he says.

Smith points out that the latest Case-Shiller report reflects home sales closing from March through May—a period when mortgage rates increased to 6.5%, intensifying affordability concerns exacerbated further by elevated inflation rates.

"Against this backdrop, housing demand remains constrained, elevated borrowing costs continue to discourage potential homebuyers, and housing values decline in real terms for existing homeowners," confirms Kaufman.

Yet, despite these challenges, the spring selling season showed impressive resilience, with existing-home sales risings 2.8% year over year in June, notching a third consecutive annual gain, though pending home sales pulled back 5.4% as the market transitioned into summer.

What's in store for housing

Looking ahead, Smith warns that the summer market faces a more complicated backdrop than earlier in the year.

Mortgage rates have risen to 6.58% as renewed geopolitical tensions in the Middle East push energy prices higher and keep the Federal Reserve on hold—a meaningful shift from the brief sub-6% window that defined the early spring. 

A soft June jobs report, with payrolls rising just 57,000 and prior months revised down, points to a labor market that is neither a tailwind nor a serious drag for housing demand. The brighter spot is inflation: June CPI came in well below expectations, with headline inflation falling to 3.5% and core cooling to 2.6%, which has taken some upward pressure off rates in the near term.

"Whether that relief holds will depend heavily on whether energy prices stabilize," says Smith.

The Realtor.com midyear forecast revised expectations lower across home sales, prices, and inventory growth, reflecting a first half that came in more tempered than anticipated. In supply-constrained markets, price growth is likely to hold, but the broadening of declines seen in recent releases suggests the national picture has more cooling ahead before it finds a floor.

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 May report primarily reflects purchase decisions made in the late winter or early spring.

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.