U.S. home prices experienced “among the weakest performances since mid-2023” in October, new figures released Tuesday show, even experiencing “a slight decline” when adjusting for inflation.
The S&P Cotality Case-Shiller National Home Price Index rose 1.3% in October from the previous month, and just 1.4% over the previous 12 months.
The U.S. Treasury Department estimates that the consumer price index rose 3.1% year over year in October, though official figures were not published by the U.S. Bureau of Labor Statistics due to the government shutdown.
“In real terms, that gap implies a slight decline in inflation-adjusted home values over the past year,” said Nicholas Godec, head of fixed-income tradables and commodities at S&P Dow Jones Indices, in a press release. Inflation has outpaced home price gains, eroding household housing wealth, through much of 2025.
Persistent purchase affordability pressures born of pandemic-era home price appreciation and subsequent elevated mortgage rates have landed home prices in a steady state of cooling.
Home-price trends continued to fluctuate along regional lines, with midwestern cities like Chicago and Cleveland leading the U.S. in annual home price gains, posting 5.8% and 4.1% growth, respectively. Home prices in New York climbed 5% year over year.
Cities across the Sun Belt observed the steepest annual declines, with prices in Tampa, Fla., Phoenix, Dallas and Miami seeing respective declines of 4.2%, 1.5%, 1.5% and 1.1% in October.
“October’s data show the housing market settling into a much slower gear,” said Godec.
That slower gear was reflected in the updated House Price Index for October, released by the Federal Housing Finance Agency (FHFA) on Tuesday.
The regulator of government-sponsored enterprises Fannie Mae and Freddie Mac reported that home prices rose 0.4% from September and 1.7% from a year earlier. Month-before figures showing no price gains from August to September were revised to a 0.1% decline.
Regional variation also defined the FHFA’s assessment of home-price performance in October, as tracked across the nine U.S. census divisions.
The East North Central division (containing Chicago and Cleveland) and Middle Atlantic division (containing New York) rose 5.1% and 5.3% respectively in October, followed by healthy gains of 3.8% and 3.7% in the West North Central and New England divisions.
The Pacific and Mountain divisions eked out limited year over year gains of 0.2% and 0.3%, while the West South Central and South Atlantic divisions slipped 0.7% and 0.5% year over year.
Consistent price cooling has yielded incremental affordability gains for homebuyers in 2025, who have also observed wage gains outpacing home price growth.
Title insurance giant First American Financial Corp. reported earlier this week that its inflation-adjusted home price index showed purchase affordability improving for the eighth consecutive month in October.
The company’s calculation of consumer home-purchasing power, which measures the amount of house a person can buy, rose 1.3% monthly in October and 5% year over year.
“Price growth has cooled, mortgage rates have eased from their peak and incomes have continued to climb higher,” said Mark Fleming, chief economist at First American, in a statement accompanying the figures.
