Real estate markets across the country are showing early signs of slowing momentum—a shift underscored by the April 2025 housing data released today from two major sources: the Federal Housing Finance Agency (FHFA) and the S&P CoreLogic Case‑Shiller Home Price Index.
Although year-over-year prices remain positive, the monthly declines (after seasonal adjustments) in both indexes suggest that the housing market may be entering a new, more balanced phase. This comes at a time when mortgage rates remain elevated and inventory levels are slightly higher, creating a more cautious environment for buyers and sellers alike.
Here’s a breakdown of what the latest data reveals—and what it could mean for you, whether you’re in the market to buy, sell, or simply stay informed.
Home Prices Declined MoM in April—But Why?
When reading market data, it’s important to distinguish between raw (unadjusted) and seasonally adjusted numbers. Spring typically brings a surge of housing activity—more listings, more buyer interest, and, historically, rising prices. Seasonal adjustment is used to remove those predictable, recurring patterns so we can detect underlying market trends.
Without seasonal adjustment:
- Home prices rose in April.
With seasonal adjustment:
- Both the FHFA and Case‑Shiller indices showed a 0.4% decline in home prices month-over-month.
This marks the first seasonally adjusted monthly decline in Case-Shiller since early 2023 and a continuation of the slower growth seen in recent months. The FHFA data, which covers homes with conforming mortgages, mirrored this trend almost exactly.
FHFA House Price Index: By the Numbers
The FHFA House Price Index (HPI), which looks specifically at homes purchased with conforming loans (i.e., those eligible for purchase by Fannie Mae and Freddie Mac), offers a broad view of U.S. housing price trends:
- Month-over-month (MoM), seasonally adjusted:
−0.4% in April
(March was revised upward from −0.1% to 0.0%) - Year-over-year (YoY):
+3.0% (April 2024 – April 2025) - Regional variations (MoM):
- West South Central & South Atlantic: −1.3%
- Middle Atlantic: +1.2%
- West South Central & South Atlantic: −1.3%
Despite the monthly dip, all nine U.S. divisions posted positive YoY price changes, ranging from +0.5% to +7.4%, confirming that national appreciation hasn’t reversed—but it is slowing.
Case‑Shiller National Index: Signs of Deceleration
The Case‑Shiller Index, which includes both conforming and non-conforming loans and places more weight on higher-priced properties, echoed similar themes:
- MoM (raw/unadjusted): +0.6%
- MoM (seasonally adjusted): −0.4%
- YoY (April 2024 – April 2025): +2.7%
(down from +3.4% in March)
This is now the smallest annual national gain since mid‑2023, reinforcing the narrative that while prices aren’t falling dramatically, the growth rate is flattening.
Why Is This Happening?
Several factors are contributing to this gradual cooling of the market:
1. Higher Mortgage Rates
Mortgage rates have remained in the upper 6% range, limiting affordability for many buyers. Higher borrowing costs reduce purchasing power, which can stall home price appreciation.
2. Increased Inventory
While inventory levels are still historically low, they have been slowly rising in many markets. More options for buyers mean less upward pressure on prices.
3. Affordability Constraints
After several years of rapid price growth, home prices in many areas have simply become too expensive for the average buyer, especially without corresponding wage increases.
4. Economic Uncertainty
Broader economic signals—ranging from consumer debt to global events—have made some buyers more cautious. A “wait-and-see” approach could be contributing to lower demand and slower price movement.
Regional Differences Still Matter
It’s important to note that real estate is local, and national averages can mask big differences at the metro and neighborhood levels. For instance:
- Coastal cities (like those in California or New York) may be seeing more pronounced cooling due to higher base prices and tax impacts.
- Midwestern and Southern markets may continue to post steady gains, thanks to affordability and job growth.
The Middle Atlantic region, for example, posted a +1.2% monthly gain, contrasting sharply with declines seen in the South Atlantic and West South Central areas.
What to Expect in the Months Ahead
While April’s data points to modest declines, this doesn’t necessarily predict a crash. Instead, we may be entering a period of market normalization after years of unsustainable growth.
Buyers
- May find more negotiating power this summer, especially if inventory continues to rise.
- Should watch interest rate trends closely—any drop in rates could reignite competition.
Sellers
- Need to be realistic with pricing. Overpricing in today’s market could lead to stagnation and price reductions later.
- Homes in great condition and priced correctly are still selling—just not with the frenzy of 2021–2022.
Investors & Agents
- Should prepare for slower deal volume and longer listing times in some areas.
- Staying informed and local-market-savvy will be key to navigating a shifting landscape.
Bottom Line: A Market in Transition
Home prices are still growing on a yearly basis, but April 2025 marks a clear slowdown in momentum. For the first time in over a year, both major price indices showed monthly declines after seasonal adjustment, suggesting that the spring market may not be as strong as years past.
While this is not a cause for alarm, it is a signal that the market is entering a new, more balanced phase—one where pricing strategy, preparation, and patience will matter more than ever.Stay Informed, Stay Ready
Whether you’re buying, selling, or advising clients, understanding the latest trends helps you stay ahead in a changing market. For personalized guidance, connect with your trusted real estate advisor or reach out to your local market expert today.