Part 2: Current State of the Housing Market; Overview for mid-January 2026
Last Friday, in Part 1: Current State of the Housing Market; Overview for mid-January 2026 I reviewed home inventory and sales. I noted that the key stories this year for existing homes are that inventory increased sharply (almost back to pre-pandemic levels), and sales in 2025 were the lowest since 1995 (slightly lower than in 2024). That means prices are under pressure, although there will not be a huge wave of distressed sales since most homeowners have substantial equity and low mortgage rates.
In Part 2, I will look at house prices, mortgage rates, rents and more.
The house price trend suggests house prices will be mostly unchanged year-over-year by the end of 2025. Lower mortgage rates have led to a pickup in purchase mortgage applications recently, but this hasn’t led to significantly more sales, at least not yet.
House Prices
The Case-Shiller National Index increased 1.4% year-over-year (YoY) in October and will likely be about the same or slightly lower year-over-year in the November report compared to October (based on other data).
The Composite 10 NSA was up 1.9% year-over-year. The Composite 20 NSA was up 1.3% year-over-year. The National index NSA was up 1.4% year-over-year.
The National index increased 0.37% month-over-month (MoM). This is the 3rd consecutive month with a MoM increase seasonally adjusted that followed 5 consecutive months with a MoM decline.
The October Case-Shiller index was a 3-month average of closing prices in August, September and October. August closing prices include some contracts signed in June. So, not only is the year-over-year change trending down, but there is a significant lag to this data.
Let’s review some more timely house price data …
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