After a strong start to the year, signs of a housing market cooling are emerging across the United States. In July, home-price growth slowed to its weakest pace of 2025, suggesting that the post-pandemic boom may be losing steam. The S&P Cotality Case-Shiller National Home Price Index rose just 1.7% year-over-year, down from 4.1% in January. On a monthly basis, the non-seasonally adjusted index slipped 0.2%—the first decline of the year and a sharp contrast to the pre-pandemic July average of a 0.5% increase.
“The market has lost momentum,” said Thom Malone, principal economist at Cotality. “Midwestern cities are still benefiting from relative affordability, but most other regions are showing cracks as affordability pressures and rising insurance costs weigh on demand.” His comments highlight a shift from nationwide strength to regional fragmentation as 2025 unfolds.
Regional Shifts
The slowdown hasn’t hit all cities equally. Cleveland and Chicago remain bright spots, posting annual price gains of 4.5% and 6.2%, respectively—well above pre-pandemic norms. In total, seven of the 20 cities tracked by the index recorded year-over-year price growth. However, Tampa led annual declines with a 2.8% drop, followed by Miami, San Francisco, and Dallas, where prices fell more than 1%. Western markets, in particular, saw the steepest pullbacks. San Francisco home prices fell 0.9% in a single month, the largest decline among major metros, while Seattle, Phoenix, Miami, and Washington, D.C. also reported notable drops.
Pressure Across the Board
Weakness spread across all housing segments. Prices for low-tier homes fell 0.2% in July, mid-tier homes declined 0.4%, and high-tier homes slipped 0.3%. Only Chicago and Minneapolis managed to post gains across all categories. The uneven performance suggests that affordability dynamics are reshaping buyer behavior. Budget-friendly Midwestern metros continue to attract buyers priced out of expensive coastal regions, while rising insurance premiums—especially those tied to climate risks—are dampening demand in the South and West.
Inventory on the Rise
Further pressure comes from growing inventory levels. Listings are slowly increasing, forcing sellers to become more flexible after years of strong price growth. Still, economists urge caution in predicting a crash. “Without a significant external shock, any pullback is likely to be modest,” Malone said. “Falling interest rates and gradually rising supply could eventually stabilize the market, but that shift may take time.”
Looking Ahead
The Case-Shiller data paints a picture of a housing market entering a delicate transition—no longer surging, but not collapsing either. As more metros slip into negative territory, analysts say 2025 will be defined by local fundamentals rather than national averages. Affordability, insurance costs, and regional economic trends will play increasingly decisive roles in determining where prices stabilize or slide further, marking a clear turning point in this phase of housing market cooling.
