MW Home-price growth fizzles as economic uncertainty weighs on home buyers

By Aarthi Swaminathan

Home prices are falling on an annual basis in Tampa but are still strong in New York City: Case-Shiller index

Home-price growth in the 20 biggest U.S. metropolitan areas is losing steam as buyers exit the housing market in the face of persistent unaffordability.

Home prices are growing much more slowly compared with the past few months. The S&P CoreLogic Case-Shiller 20-city home-price index rose 4.5% in February compared with a year ago.

The Case-Shiller index measures repeat-sales data. It reflects a three-month moving average and generally has a two-month lag.

The previous month, home prices rose 4.7% on an annual basis.

A broader measure of home prices, the national index, also showed signs of slowing. Nationally, home prices rose 3.9% in February from a year ago, a deceleration from a rate of 4.1% in the previous month.

Home-price growth could slow even further in the months ahead as economic uncertainty weighs on home buyers.

Bess Freedman, chief executive of New York-based real-estate company Brown Harris Stevens, said that as of the end of April, she has heard more stories from her agents about buyers holding off in the current environment.

"There is a decent amount of uncertainty in the air," she told MarketWatch.

Read more: Spooked house hunters are dropping out of the real-estate market as they confront economic uncertainty on many fronts

The index makers pointed to the deceleration in prices but said that marked a return to a regular market. "Buyer demand has certainly cooled compared to the frenzied pace of prior years, but limited housing supply continues to underpin prices in most markets," Nicholas Godec, head of fixed-income tradeables and commodities at S&P Dow Jones Indices, said in a statement.

"Rather than broad declines, we are seeing a slower, more sustainable pace of price growth," he said.

Even if prices are growing less rapidly, the 20-city and the national indexes still inched up to record highs in February.

Within the 20-city index, New York posted the biggest year-over-year home-price gains in February. Prices were up 7.7%. The city was followed by Chicago and Cleveland, which saw home prices grow 7% and 6.6%, respectively.

Tampa saw the biggest drop in prices compared with a year ago, with prices falling by 1.5%. Miami also saw prices fall in February compared with the year before, by 0.3%.

Nationally, the median price of a resale single-family home in February was $400,900, a condo or a co-op was $354,800, and a newly built single-family home was $411,500.

Housing market hits a big roadblock in early 2025

What is normally the busiest season for the real-estate market is turning out to be another bust.

Sentiment is souring. The Case-Shiller index is typically backward looking, so it doesn't quite reflect the current mood. And the mood among buyers and sellers as of April is one of uncertainty. People are worried about the future of the U.S. economy and about their investment portfolios due to stock-market volatility. And that's affecting their decision to buy now or to wait.

The pullback in demand could hurt home sellers. Sellers are already contending with an increase in competition as more listings hit certain markets. Some homeowners are slashing prices as they struggle to sell their homes. Real-estate giant Zillow reported in March that nearly 1 in 4 listings on the site have had a price cut.

"Some sellers are definitely struggling, but it's usually tied to pricing or presentation," Chris Morrison, a Scottsdale, Ariz.-based founding partner and agent at real-estate company Retsy, told MarketWatch.

"If a property is outdated or overpriced, it lingers. But well-prepared homes that are priced right are still moving quickly, especially in strong submarkets," he added.

Home sales in 2024 hit a 30-year low, and 2025 is already shaping up to be another rough year, said Freedman at Brown Harris Stevens.

After the presidential election, she said she had been optimistic about the year and thought that the market was "headed for steady waters."

"Boy, was I wrong," she said. "This is some turbulent flight."

-Aarthi Swaminathan

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April 29, 2025 09:27 ET (13:27 GMT)

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