Part 2: Current State of the Housing Market; Overview for mid-September 2025
On Wednesday, in Part 1: Current State of the Housing Market; Overview for mid-September 2025 I reviewed home inventory, housing starts and sales. I noted that the key stories this year for existing homes are that inventory increased sharply, and sales are down slightly year-to-date compared to last year (and sales in 2024 were the lowest since 1995). That means prices are under pressure.
In Part 2, I will look at house prices, mortgage rates, rents and more.
As I noted last week, the house price trend suggests house prices will be down year-over-year by the end of 2025. However, there are two new powerful forces pushing in opposite directions - mortgage rates have declined, and unemployment is increasing. Both could impact sales and house prices.
Earlier this week, Cotality’s Chief Economist Dr. Selma Hepp (formerly CoreLogic) wrote: “July’s decline in home prices is atypical — the last two periods where we saw monthly declines in July was in 2022 and during 2006-2008 period …” In 2022, house prices fell briefly as mortgage rates surged higher, and inventory increased sharply. And the 2006-2008 period was the start of the housing bust.
House Prices
The Case-Shiller National Index increased 1.9% year-over-year (YoY) in June and will likely be lower year-over-year in the July report compared to June (based on other data).
The Composite 10 NSA was up 2.6% year-over-year. The Composite 20 NSA was up 2.1% year-over-year. The National index NSA was up 1.9% year-over-year.
The MoM decrease in the seasonally adjusted (SA) Case-Shiller National Index was at -0.26% (a -3.1% annual rate). This was the fourth consecutive MoM decrease.
In the January report, the Case-Shiller National index was up 4.2%, in February up 3.9%, in March up 3.4%, in April report up 2.7%, in May up 2.3% and in June up 1.9%.
And the June Case-Shiller index was a 3-month average of closing prices in April, May and June. April closing prices include some contracts signed in February.
So, not only is this trending down, but there is a significant lag to this data.
Let’s review some more timely house price data …
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