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September 2025 S&P Cotality Case-Shiller Index Analysis

The S&P Cotality Case-Shiller U.S. National Home Price NSA Index has indicated a modest 1.3% annual increase for September 2025. This figure reflects a slight decline from the previous month's growth, which stood at 1.4%. The data illustrates a continuing trend where inflation outpaces the appreciation of home prices for the fourth consecutive month. Specifically, the Consumer Price Index (CPI) for September was noted to be 1.7 percentage points higher than the growth in housing prices, marking the widest divergence since June.

All 20 metropolitan areas tracked by the index recorded month-over-month declines prior to any seasonal adjustments. These findings highlight a widespread cooling of the housing market, which appears to be significantly impacted by elevated mortgage rates affecting both affordability and buyer demand.

Nicholas Godec, the Head of Fixed Income Tradables Commodities at S&P Dow Jones Indices, remarked on the accelerating slowdown of the housing market, highlighting that September's 1.3% annual gain is the weakest since mid-2023. This slump represents a stark contrast to the once vigorous double-digit growth seen in the post-pandemic recovery phase. Godec emphasized that the rising inflationary pressures are causing national home prices to lag behind the rate of rising costs, indicating persistent challenges ahead.

Regional Discrepancies
Regional trends tell an interesting story—with Chicago emerging as a leader with a noteworthy 5.5% annual increase, followed closely by New York (5.2%) and Boston (4.1%). These metros have shown resilience even while other areas are displaying weakness. Conversely, Tampa reported a sharp decrease of 4.1%, marking its 11th month of negative annual returns, with Phoenix, Dallas, and Miami similarly recording annual declines. The data signifies an intriguing geographical shift, moving away from the once-booming Sun Belt markets which had experienced the most dramatic price surges during the pandemic.

Market Weakness Across the Board
The overall month’s performance was broadly weak, evidenced by all 20 tracked metros showing month-over-month contractions before seasonal adjustments. Tampa, San Diego, and Seattle faced the steepest declines during this period. Even with seasonal adjustments taken into account, the U.S. National Index barely managed a 0.2% gain, suggesting that higher mortgage rates, which were lingering near 6.3% in late September, are overpowering supply constraints in the current market.

A closer examination of the price trends over a six-month horizon indicates national home prices experienced just a 0.4% increase—an insignificant shift in real terms, effectively implying depreciation when adjusted for inflation. The general deceleration in market momentum has predominantly impacted the Sun Belt and Western regions, underscoring the detrimental effects of increasing affordability issues coupled with high mortgage rates.

Looking back, this marks the weakest annual price growth observed since early 2023, a period that bore its own challenges as the market reacted to initial shocks from the Federal Reserve's aggressive rate-hiking measures. However, unlike that faster recovery, current trends suggest persistent difficulties ahead. The combination of sustained high mortgage rates and affordability challenges signals a probable transition towards more minimal price growth, or in several areas, a possible ongoing decline.

Year-over-Year Trends
For clarity, the composite results for September 2025 indicate a year-over-year gain of 1.3% for the National index, a decline from August’s 1.4%. The 10-City Composite likewise experienced a year-over-year growth of 2.0% while the 20-City Composite slightly decreased to 1.4%, both down from the previous month’s reports.

Chicago maintained its position with the highest annual gains, while Tampa remained at the bottom, reflecting ongoing volatility in home values across various markets. September’s figures serve as a reminder of the complex dynamics influencing the housing sector today.

In conclusion, while some markets exhibit resilience, the overall trend leans towards caution, as economic factors continue to exert pressure on housing markets. The data emphasizes the importance of monitoring ongoing developments to understand potential future movement in home prices.