Home prices rose just 1.3 percent in 2025, the slowest pace of appreciation in over 15 years, according to data released Tuesday by S&P Dow Jones Indices.
The S&P CoreLogic Case-Shiller National Home Price Index recorded a 1.3 percent year-over-year increase in December, down from 1.4 percent in November. For the full year, national home prices grew just 1.3 percent—the weakest full-year gain since 2011, when prices dropped 3.9 percent.
The deceleration represents a sharp reversal from the Biden-era inflationary housing price surge, when annual price gains regularly exceeded 10 percent in 2021 and 2022. The 2025 increase is also well below the 6.6 percent average annual gain recorded over the prior decade.
With inflation running at 2.7 percent in 2025, home prices rose at a slower rate than the broader cost of living for the first time in over a decade. The result: homes became more affordable in real terms, with wages and savings gaining ground relative to housing costs.
Housing affordability emerged as a top concern for voters heading into the 2024 election. A Redfin survey from October 2024 found that 82 percent of prospective homebuyers said affordability would influence their vote, as surging prices had priced millions of Americans out of homeownership.
“National home prices grew just 1.3% for the year—the weakest full-year gain since 2011,” said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. “Two structural forces have reshaped the market over recent years: mortgage rates and inflation.”
The Trump administration’s immigration enforcement is likely playing a role in stabilizing the housing market, with hundreds of thousands of illegal aliens exiting the U.S. housing market, freeing up supply for legal residents and U.S. citizens.
The 30-year mortgage rate closed 2025 at 6.15 percent, sharply down from the 6.85 percent rate a year earlier and the 7.8 percent hit in the third year of Biden’s presidency.
The 10-city index rose 1.9 percent year-over-year to 357.32, while the 20-city index increased 1.4 percent to 336.89. Both indexes declined 0.1 percent month-over-month before seasonal adjustment.
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