"Annualized price growth slowed from 3.4% at the beginning of 2025 to 1.1% in October - the slowest pace since early 2012, Cotality noted in its monthly U.S. Home Price Insights report. "The housing market in 2025 demonstrated remarkable resilience despite significant headwinds," Chief Economist Selma Hepp said. "Slowing price growth reflects a much-needed rebalancing after years of unsustainable gains. While some markets are experiencing declines, these adjustments will help restore affordability over time and make housing more accessible to a wider group of buyers.""
"Geographically, trends varied widely. The 30% surge in pricing that took place in Florida and the Southeast in 2022 is long gone; cities in Florida and Texas account for nine of the 10 coolest markets in the country, Cotality said. Meanwhile, the hottest markets are those that did not see the dramatic run-up in home prices during the pandemic. Eight of the top 10 hottest markets are in the Midwest."
U.S. home prices continued to increase in October while annualized growth decelerated from 3.4% at the start of 2025 to 1.1%, the slowest rate since early 2012. Price growth has cooled after earlier rapid gains, producing sharp regional divergence: former boom markets in Florida and Texas have cooled, while many Midwest cities are among the hottest. Slower growth is helping restore affordability. Demand will favor regions offering economic opportunity and relative affordability. Mortgage rates and supply conditions remain the key determinants for 2026; a notable rate drop combined with low supply could re-accelerate price gains.
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