Annual prices increased nominally but continued to decline in real terms in May, according to the S&P Cotality Case-Shiller National Home Price NSA Index. May’s 1.1% annual increase in prices was outpaced by May’s 4.2% inflation rate. May marked the 12th consecutive month home values fell in real terms.
“Even on a nominal basis, the market remains noticeably weaker than a year ago,” Rebecca Kaufman, associate director of commodities at S&P Dow Jones Indices said. “In May 2025, the National Home Price was up 2.4% year over year.”
Once again, nine percentage points separated May’s strongest market (Chicago, 6.9% annual gain in home prices) and its weakest (Las Vegas, 1.9% annual decline in home prices). After Chicago, New York (+4.2%) and Cleveland (+3.1%) posted the strongest annual gains while Seattle (-1.8%), Denver (-1.8%), and Tampa (-1.6%) registered annual declines.
“This divergence may reflect shifting post-pandemic housing dynamics, including a growing return-to-office mandate that appears to be supporting traditional urban markets,” Kaufman noted.
The 10-City Composite index and 20-City Composite index reported annual gains of 2.4% and 1.6%, respectively. On a month-over-month basis, the 10-City and 20-City Composite indices both increased by 0.9% while the National Index posted a 0.6% gain.
“The geographic dispersion of home price trends continues to persist,” Kaufman said. “While major metropolitan areas in the Northeast and Midwest recorded year-over-year gains exceeding the national average, many metropolitan areas in the West and Sunbelt regions remain under pressure.
“Affordability remains a significant headwind for the housing market,” Kaufman concluded. “Thirty-year mortgage rates increased to 6.5% in May. At the same time, stubbornly high inflation rates are keeping both the cost of home financing and the cost of living high for prospective buyers. Against this backdrop, housing demand remains constrained, elevated borrowing costs continue to discourage potential home buyers, and housing values decline in real terms for existing homeowners.”
