Fewer bidding wars and more inventory mark a new market phase
Annual home price gains across the United States have slowed to their most modest pace in nearly two years, signaling a new phase in the housing cycle as more buyers step back from the market.
The national index showed a 2.7% annual gain in April, down from 3.4% the previous month, according to the latest S&P CoreLogic Case-Shiller Indices released by S&P Dow Jones Indices (S&P DJI). The 10-City Composite saw prices rise 4.1% year-over-year (down from 4.8%), while the 20-City Composite posted a 3.4% increase (down from 4.1%).
“The housing market continued its gradual deceleration in April, with annual price gains slowing to their most modest pace in nearly two years,” said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices.
New York led all major cities with a robust 7.9% annual gain, followed by Chicago (6.0%) and Detroit (5.5%). At the other end of the spectrum, Tampa slipped 2.2%, while Dallas dipped 0.2%, making them the only two metros to post annual declines. San Francisco managed just a 0.2% gain, with Phoenix and Miami barely positive at 1.3% and 1.4%, respectively.
“What’s particularly striking is how this cycle has reshuffled regional leadership, markets that were pandemic darlings are now lagging, while historically steady performers in the Midwest and Northeast are setting the pace,” Godec added. “This rotation signals a maturing market that’s increasingly driven by fundamentals rather than speculative fervor.”
Monthly trends showed continued, if weaker, seasonal strength. The National Index posted a 0.6% increase before seasonal adjustment in April, with both the 10-City and 20-City Composites up 0.7%.
“April’s monthly performance showed continued seasonal strength but with notable cooling from March's peak,” Godec said, adding that the divergence between raw and seasonally adjusted numbers suggests “the market’s seasonal rhythms may be dampening as affordability pressures intensify.”
Redfin senior economist Sheharyar Bokhari emphasized the growing pressure on sellers as buyers retreat.
“Sellers are starting to feel pressure because many buyers have put their home search on pause in response to high housing costs, elevated mortgage rates and economic uncertainty,” he said. “More sellers are likely to adjust their price expectations in the coming months as they see examples of the market shifting in favor of buyers, like homes selling below asking prices.
“Still, home price trends are always local and some areas—particularly on the East Coast—continue to see strong growth.”
Godec noted that roughly 1.7 percentage points of April’s annual increase occurred in the past six months, highlighting the momentum from the recent spring selling season rather than sustained growth throughout the year.
Nationally, fewer than one-third (31.2%) of homes sold in May went for over asking price, the lowest share for May in five years. Pending sales are also declining, and inventory continues to rise.
“We’re witnessing a housing market in transition. The era of broad-based, rapid price appreciation appears over, replaced by a more selective environment where local fundamentals matter more than national trends,” Godec said.
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