U.S. home values ended 2025 with a whimper, posting a sluggish 1.3% annual gain for December. This marks the weakest full-year performance in nearly 14 years, as elevated mortgage rates and cooling Sun Belt markets dragged down national averages.

Data released Tuesday by S&P Dow Jones Indices revealed a tale of two halves for the housing market in 2025. According to the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, while national prices climbed 2.6% in the first six months of the year, they contracted by 1.3% in the back half across all 20 tracked major metro areas.

This downward trajectory was also present in November’s Case-Shiller index data, reinforcing the trend. Furthermore, the data paints a challenging picture for homeowners relying on property appreciation to outpace the cost of living.

With annual inflation registering at roughly 2.7% at the end of 2025, real home value returns turned negative for the year. This shift officially reverses a decade-long trend of housing appreciation reliably outpacing consumer price gains.

The year-end data highlights a sharp geographic divergence, emphasizing that the U.S. housing market is far from a monolithic, static entity.

Historically steady Midwest and Northeast metros led the nation in price growth, benefiting from tight resale inventory and more accessible price points compared to coastal counterparts. Chicago saw the highest annual increase at 5.3%, followed closely by New York, which posted a 5.1% year-over-year gain.

Conversely, pandemic-era boomtowns in the South and West continued to correct under the weight of stretched affordability and rising inventory levels, said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, in remarks accompanying the report.

Tampa, Fla., led the nation’s declines with a 2.9% drop in prices. Denver followed with a 2.1% decrease and Phoenix posted a 1.5% annual decline.