Cotality

While housing markets are increasingly tilting in favor of buyers, February’s strong prices mostly reflect the impact of wildfires on markets in the West.

‍IRVINE, Calif., April 29, 2025 – Cotality, a leading global property information, analytics, and data-enabled solutions provider, today released its latest findings on housing prices from the S&P CoreLogic Case-Shiller Home Price Index.

Although the housing market showed signs of growth this spring, they were short lived, and further improvements to the market this year may be challenging. March’s lower mortgage rates increased pending sales activity by about 12% year over year. However, mortgage rates surged in April, affecting consumer sentiment negatively with worries about personal finances, job prospects, and potential tariff impacts.

Despite these challenges, for-sale inventories have improved, particularly in the West, which has helped those markets see some gains in home sales activity. Southern California and North Carolina both saw upticks in existing home sales year to date. Among larger markets, Los Angeles leads with a 14% year-to-date jump in home sales. While some of Los Angeles’ increase may be due to the wildfires forcing affected families to find new shelter immediately, the metro’s homes sales activity was already improving in 2024 thanks to more supply across the region. Similarly, Oxnard, Anaheim, and San Jose saw better sales. North Carolina was another region with marked growth in 2025, with the cities of Durham and Winston-Salem ranking among the top markets for improved home sales. In contrast, many other markets saw slower home sales compared to last year, particularly in Florida and Texas, which remain near 20%+ below last year’s levels.

“Interestingly, February home prices jumped 0.4% from January, indicating stronger seasonal gains than seen pre-pandemic and highlighting the impact of January’s wildfires in the West. Price gains were particularly apparent in Los Angeles where home prices jumped three times faster this February than in previous years,” said Cotality’s Chief Economist Selma Hepp. “And while challenges will continue, the 2025 homebuying season has so far shown improving housing fundamentals. As mortgage rates move closer to 6%, homebuyers appear willing to step off the sidelines and take advantage of the larger inventories that give them the upper hand following years of difficult spring homebuying seasons. Lastly, home price changes continued to paint a story of bifurcating housing markets where we see stronger gains in the Northeast and the West while the South is experiencing slowing and declining prices.”

Regional trends in home sales activity resemble home price trends closely, and these trends indicate that slower home price appreciation is likely to continue. In February, the S&P Case-Shiller Index rose 3.9%. This continues the trend toward slower sales that started in 2024 and reverses the previous two months of increased appreciation, which mostly reflected the weak 2023 year-end (Figure 1).

The latest Cotality Home Price Index report forecasts slower home price gains through April before picking back up, but that uptick is in comparison with a mostly flat second half of 2024. Overall, appreciation for 2025 is expected to remain lower than in 2024, averaging about 3.2% nationally. Flattening home prices in the second half of 2024 highlight the impact of high mortgage rates and buyer fatigue which has slowed homebuying demand.

The non-seasonally adjusted, month-over-month index recorded a 0.4% increase in February, marking the second consecutive monthly increase after five prior months of small declines. The monthly change is above the average 0.2% increase recorded between 2015 and 2019, which may be driven by large positive increases seen in the Western markets (Figure 2).

The 10-city and 20-city composite indexes also slowed in February after a small uptick in January, with annual growth at 5.2% and 4.5%, respectively. This is down from the March 2024 peak when the 10-city composite index recorded 8.3% growth and the 20-city composite recorded 7.5% growth. Similarly to national index, the city composites haven’t changed notably from their September levels.

Compared with the 2006 peak, the national index is 76% higher, the 10-city composite index is 57% higher, and the 20-city composite 62% higher. Adjusted for inflation, the 10-city index is now 4% higher than its 2006 level and the 20-city index is up by 8% when compared with its 2006 high point. When adjusted for inflation, national home prices are 17% higher compared with 2006. Inflation-adjusted prices haven’t shown the same level of appreciation as nominal prices given elevated inflation in recent years. Recent Cotality analysis of U.S. metros also showed the geographically unequal impacts of inflation.