US Home Price Growth Cools to Post-Recession Low
Event summary
- Cotality's Home Price Index (HPI) for December 2025 shows U.S. home price growth at 0.9%, the slowest rate since the post-Great Recession period.
- While national growth is soft, states like New Jersey (+5.5%), Illinois (+5.4%), Nebraska (+5.4%), and Connecticut (+5.1%) are experiencing strong price growth.
- Several states including New Jersey, Pennsylvania, Delaware, Nebraska, Louisiana, Indiana, and Mississippi recorded new high home price growth in December 2025.
- Regions including the South and West (Florida, Texas, Colorado, etc.) are experiencing negative home price growth, largely due to increased inventory and decreased migration.
- Mortgage rates have fallen 50 basis points since the summer, contributing to market stabilization.
The big picture
The deceleration in U.S. home price growth signals a significant shift away from the pandemic-era boom, indicating a rebalancing of the market. This slowdown underscores the importance of fundamental economic factors – income growth, job creation, and affordability – in sustaining housing demand. While the recent drop in mortgage rates offers temporary support, the long-term trajectory of the market will depend on broader economic conditions and regional variations in housing demand.
What we're watching
- Regional Divergence
- The sustained strength in the Northeast and Midwest suggests a potential bifurcation in the housing market, requiring closer monitoring of regional economic drivers.
- Mortgage Rate Impact
- Further declines in mortgage rates could provide additional support to the housing market, but the sustainability of these rates given broader macroeconomic conditions remains a key risk.
- Inventory Dynamics
- The pace at which inventory levels adjust will be critical; a significant increase could exacerbate downward pressure on prices in the South and West.
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