Home prices flatten as regional splits deepen

U.S. home prices are settling into a new divide, with much of the country seeing growth stall in November while a handful of regions continue to push higher, deepening a split that is reshaping the national housing picture.

Numbers showed "persistent softness," according to the S&P Cotality Case-Shiller national home price index, with values edging downward 0.1% from October to November, the exact same pace as in the prior monthly report. Monthly HPI readings have decreased for five months in a row. Case-Shiller data was not seasonally adjusted. 

At the same time, the index increased 1.4% on a year-over-year basis in November, maintaining the same rate of one month earlier, and stayed near its weakest showing since mid 2023. Still, annual growth came in at just about half the 3.7% pace of one year earlier. 

"November's results confirm that the housing market has entered a period of tepid growth," said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. 

A host of economic factors have led to recent sluggishness in the housing market, he continued. Despite signs of moderation in both inflation and mortgage rates in November, elevated financing costs still pose obstacles, effectively capping potential growth, he said. The increase in annual inflation was almost double the pace of the rise in the Case-Shiller index. 

"Inflation has erased most nominal gains, leaving home values essentially flat in real terms," Godec said. 

Fifteen out of 20 metropolitan markets registered monthly price decreases compared to October, according to S&P's findings. 

What FHFA sees in its housing data

Similarly, the Federal Housing Finance Association, which tracks purchase-transaction data coming through government-sponsored enterprises, Fannie Mae and Freddie Mac, found a significant slowdown in yearly home-price growth. Its November House Price Index increased by just 1.9% on a seasonally adjusted basis compared to one year earlier. The number reflected an uptick from 1.7% in October. 

Compared to one year earlier, however, the rate of increase was well off the 4.8% pace in November 2024. 

Between the most recent October and November, home values grew 0.6%, up from the prior month's 0.4%. FHFA found no decreases in prices anywhere in the U.S. in November, but growth flattened in its Middle Atlantic division and rose to as high as 1.1% in the East South Central. The West South Central region was just behind at 1%. 

A wider divergence in regional home price trends showed up in the annual numbers, though. House values fell by 0.4% in FHFA's Pacific division, while the Mountain region also posted a decrease of 0.1%. 

Outside of the West, home price growth either came in flat or on the upside across the U.S.  In the East North Central division, values climbed up 5.1% to lead the nation. Behind it were the Middle Atlantic and New England regions at 4.3% and 3.7%, respectively.

The West North Central posted a 3.4% year-over-year gain, followed by the East South Central region at 3%.