The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, a widely followed measure of home values, reported another record high in the U.S. housing market, showing a 6.3% annual gain in April 2025. Even though the pace of price increases is cooling slightly compared to earlier months, home prices continue to rise and have now surpassed previous all-time highs.
This trend reflects ongoing demand, limited housing supply, and rising construction costs, despite higher mortgage rates and affordability challenges for buyers.
According to the latest report by S&P Dow Jones Indices, all 20 major metropolitan areas covered in the Case-Shiller 20-City Composite posted year-over-year price increases. Some cities like San Diego, New York, and Chicago have seen particularly strong appreciation in home values.
San Diego Leads Home Price Growth Among Metro Areas
Among the top cities, San Diego took the lead with a 9.8% year-over-year increase in home prices, followed closely by New York at 8.2% and Chicago at 7.8%. These cities reflect local dynamics, such as population shifts, tight inventory, and urban revitalization efforts.
This marks the seventh consecutive month where all 20 metro areas saw annual price growth. Though growth is slower compared to early 2022 levels, it remains strong historically.
“Home prices across the United States have reached new highs,” said Brian D. Luke, Head of Commodities, Real & Digital Assets at S&P DJI. “While the pace of gains has slowed, the consistency across markets suggests ongoing stability in the housing sector.”
Why Prices Are Still Climbing Despite High Mortgage Rates
You might wonder why home prices are still going up even though borrowing is more expensive. The main reason is the limited housing supply. Many homeowners are holding on to their properties because they secured ultra-low mortgage rates in past years. As a result, fewer homes are available for sale, pushing up prices for the limited inventory that exists.
In addition, construction costs remain high due to labor shortages and rising material prices. This also limits the pace of new housing developments and adds upward pressure on home prices.
Even with 30-year mortgage rates hovering above 7%, buyers continue entering the market, often paying above asking price in competitive regions.
Monthly Changes Show a Seasonal Cooling
On a month-over-month basis, home prices increased by 0.3% in April (seasonally adjusted). While that’s still positive, it shows a deceleration from the 0.5% to 0.6% monthly increases seen earlier this year.
This seasonal slowdown is typical for spring, especially following aggressive price jumps during the previous months. But analysts suggest this isn’t necessarily the sign of a weakening market—just a slight cooling from the recent sizzle.
For example, April 2025’s 6.3% annual increase is slightly below the revised 6.7% increase seen in March, but still well above the long-term average.
What This Means for Buyers and Sellers
For buyers, this news might feel discouraging. With mortgage rates remaining high and prices still rising, affordability is a growing concern. According to the National Association of Realtors (NAR), first-time homebuyer affordability is at its lowest point in over a decade.
However, some experts believe this could create more room for negotiation in the coming months, especially in overheated markets.
For sellers, this is still a strong time to list. Demand remains high in many cities, and inventory is low. Homes that are priced competitively and in good condition are still selling quickly.
Market Outlook: Will Prices Keep Climbing?
Analysts remain cautiously optimistic. Many believe that price growth will continue, but at a slower pace through the rest of 2025.
“The housing market is not overheating like in 2021, but it remains resilient,” said Selma Hepp, Chief Economist at CoreLogic. “Demographics, a strong labor market, and supply shortages continue to support price growth.”
However, risks remain. A significant rise in unemployment, a surge in new housing supply, or more aggressive interest rate hikes by the Federal Reserve could change the picture quickly.
Some economists are also watching the Fed’s stance on inflation, which could influence borrowing costs. If inflation persists and the Fed keeps rates high, the housing market may face greater headwinds.
Regional Highlights: Who’s Gaining, Who’s Lagging?
Here’s a snapshot of some major cities’ year-over-year home price increases (April 2025):
- San Diego: +9.8%
- New York: +8.2%
- Chicago: +7.8%
- Miami: +7.3%
- Detroit: +6.9%
- Seattle: +5.1%
- Portland: +3.9%
- Phoenix: +4.0%
- Las Vegas: +3.4%
Notably, the West Coast cities like San Francisco and Seattle are seeing slower growth, while Midwestern and Southern cities are catching up after years of relatively flat prices.
Final Thoughts: Housing Remains a Solid Asset
Despite affordability challenges and macroeconomic uncertainty, real estate continues to show strength as a long-term investment. While the pace of growth may slow, prices are still moving up—offering gains for homeowners and investors alike.
Whether you’re planning to buy or sell, the key is to stay informed and realistic about your local market. As always, consult a real estate professional to guide your decision-making based on current conditions.
Also Read – Foreign Investment in U.S. Treasuries Surges 3.4% in February
