Overview
- Year-over-year price growth continues its downward trend, with growth slowing to just 0.9% in December 2025.
- Midwest and Northeast hubs continue to show resilience, Newark, NJ, Allentown, PA, and Chicago, IL all saw annual price growth gain traction in December.
- Wyoming and New Jersey lead the nation with annual home price appreciation, far outperforming the cooling national average.
National home price growth
December 2025 data
Source: Cotality
Affordability meter
Source: Cotality
Insights from Chief Economist Dr. Selma Hepp
As winter settles in, national housing growth continues to cool alongside the weather. In December, annual price growth slowed to just 0.9% — one of the softest rates since the post-Great Recession recovery. This signals the market is in a definitive rebalancing phase where strong economic and housing fundamentals are necessary to support local housing demand.
While national growth softens, the Midwest and parts of Northeast remain pillars of growth due to their relative affordability,diversified job markets, and hybrid work dynamics. States like New Jersey (+5.5%), Illinois (+5.4%), Nebraska (+5.4%), and Connecticut (+5.1%) are among the nation’s strongest performers, with markets like Newark, Allentown, and Chicago recording gains that run counter to the broader cooling trend.
“We are seeing a significant departure from the rapid surges of recent years; while the upward pressure on prices remains, the momentum has moderated enough to suggest that the market is finally becoming more navigable for prospective buyers,” said Cotality Chief Economist Dr. Selma Hepp.
On the other hand, negative home price growth is dominating the South and the West—including Florida, Texas, Colorado, Washington D.C., Hawaii, Arizona, Utah, Oregon, and California—reflecting the pressure of higher inventory levels and moderating in-migration in markets that previously saw rapid expansion.
December’s data confirms that the U.S. housing market is entering a clear rebalancing phase. However, there are signs that this deceleration may be leveling off. In December, fewer of the top 100 metros recorded slowing appreciation compared to the previous year – 49 out of 100 compared to 77 earlier in the fall. An important contributor helping home prices level off are lower mortgage rates which have fallen some 50 basis points since this summer.
Despite regional differences, current housing market conditions signal a return to a long‑anticipated normalization driven by economic and housing fundamentals. The frantic bidding wars and double‑digit price surges of recent years have givenway to a market where buyers and sellers must gradually realign their expectations.
“As we move through 2026, the market’s trajectory will depend heavily on wage growth and how soon buyers regain the purchasing power needed to meet sellers’ pricing thresholds. For now, Cotality data shows a housing landscape is still finding its footing, but it is ultimately stabilizing after an extended period of imbalance.”
-Dr. Selma Hepp
Cotality’s Chief Economist
Top 10 hottest markets
Source: Cotality
Top 10 coolest markets
Source: Cotality
Which areas are affordable?
Tracking the top 5 highest and lowest U.S. median sales prices
Source: Cotality Listing Trends data
Markets to watch
Tracking markets with a very high risk of price decline in the top 100 CBSAs
Source: Cotality
High-risk market home price trends
Source: Cotality
.jpg)
