Home Prices Split Sharply by Region as National Gains Outpace Last Year but Still Trail Inflation

Home prices nationally rose 1.5 percent in June from a year earlier, the fastest annual pace in the S&P Cotality Case-Shiller index since the start of the year, but the gain still lagged inflation for the 13th consecutive month, according to data released Tuesday by S&P Dow Jones Indices. Beneath the modest national number, the closely watched S&P Cotality Case-Shiller index showed a housing market splitting in two: prices climbing nearly 7 percent in Chicago while falling 2 percent in Seattle, an almost nine-point gap between the country's strongest and weakest major markets.

The report, compiled from repeat-sales data on single-family homes in 20 major metropolitan areas, is one of the most closely tracked gauges of the US housing market and is published roughly two months after the period it covers, meaning Tuesday's figures reflect closings that occurred before this summer's selling season had fully played out.

The numbers

The S&P Cotality Case-Shiller US National Home Price Index posted a 1.5 percent annual gain in June, up from 1.2 percent in May. The 10-City Composite rose 2.9 percent year over year, up from 2.4 percent, while the 20-City Composite climbed 2.1 percent, up from 1.6 percent. On a seasonally adjusted monthly basis, the National, 10-City and 20-City indices rose 0.1 percent, 0.3 percent and 0.2 percent, respectively, following three straight months of seasonally adjusted declines.

Chicago posted the largest annual increase among the 20 cities at 6.9 percent, followed by New York at 4.8 percent and Cleveland at 4.1 percent. Seattle recorded the weakest performance, down 2.0 percent year over year, with Las Vegas off 1.9 percent and Denver down 1.2 percent. Detroit was excluded from this month's release because of continuing transaction-recording delays at the Wayne County records office, S&P said.

Because consumer prices rose 3.5 percent over the same 12 months, the report noted that home values fell in inflation-adjusted terms for the 13th month in a row, even as nominal prices ticked higher. The gap between nominal price growth and inflation narrowed slightly from May, when it stood closer to three percentage points.

"While home prices continue to decline in real terms, lower inflation and firmer nominal home price growth helped slow the erosion pace," said Rebecca Kaufman, associate director at S&P Dow Jones Indices, who added that the regional split "reflects a years-long trend, with housing markets in the Northeast and Midwest regaining strength while many Western and Sunbelt markets soften."

How the market got here

The divergence has been building for more than a year. Northeastern and Midwestern cities such as Chicago, New York and Cleveland have relatively tight housing supply, lower rates of new construction and, in Chicago's case, an inventory of comparatively affordable homes that has drawn buyers priced out of coastal markets. Sunbelt and Western metros including Seattle, Las Vegas, Denver, Phoenix and Miami saw sharp price run-ups during the pandemic buying boom of 2021 and 2022 and have since built more new housing supply, leaving those markets more exposed as demand has cooled.

Mortgage rates are also weighing on the market broadly. Freddie Mac's Primary Mortgage Market Survey showed the average 30-year fixed rate near 6.5 percent through June, its highest level since August 2025, according to the S&P report. Elevated borrowing costs have discouraged existing homeowners who locked in lower rates years ago from listing their homes, constraining supply even in markets with softening demand, while also limiting how much buyers can afford to bid. That combination — thin inventory in some cities, ample inventory in others, and financing costs elevated everywhere — helps explain why a single national index figure can mask such different experiences from one metro area to the next.

HousingWire's analysis of the release noted that the modest month-over-month improvement — the first seasonally adjusted gain after three consecutive monthly declines — came alongside a cooling in the headline inflation rate, which took some of the pressure off real home values without reversing the broader trend. The financial newsletter Calculated Risk, which tracks the index closely each month, also flagged the Federal Housing Finance Agency's competing home-price measure, which showed a similar 2.1 percent annual gain in June and was essentially flat month over month.

Who is affected

The split market carries different consequences depending on where a household sits. In Chicago, Cleveland and other markets posting solid gains, sellers are seeing genuine equity growth and buyers face renewed competition for a limited supply of listings. In Seattle, Las Vegas and Denver, sellers who bought near recent peaks may find their homes worth less than a year ago, while buyers in those metros have somewhat more negotiating leverage and, in some cases, more inventory to choose from.

Nationally, prospective first-time buyers continue to face the combination of near-6.5-percent mortgage rates and home values that, while growing more slowly than in the pandemic-era boom, have still outpaced wage growth over the past several years. Current homeowners with fixed low-rate mortgages remain reluctant to sell and take on a new loan at today's rates, a dynamic economists have called the "lock-in effect," which continues to restrain the number of homes available for sale in much of the country.

Homeowners considering a move within the same market are largely insulated from the regional swings, since a sale and a subsequent purchase tend to happen at similar local price levels. The divergence matters more for households relocating across regions — a homeowner selling in Seattle and buying in Chicago, for instance, would effectively be selling into a softer market and buying into a firmer one, compounding the affordability gap in the destination city.

• Home sellers in Chicago, New York and Cleveland are seeing the strongest annual price appreciation among major metros.
• Sellers in Seattle, Las Vegas and Denver are contending with year-over-year price declines.
• Real, inflation-adjusted home values have now fallen for 13 consecutive months nationally.
• Detroit's index was omitted this month because of a data-recording backlog at the county level.

Reaction and what happens next

Industry economists cited in trade coverage of the report cautioned against reading too much into the modest acceleration. Anthony Smith, an economist at Realtor.com, said the pickup in price growth seen earlier in the year "may be harder to sustain into summer" as affordability pressures persist and existing-home sales, though up for four consecutive months through July, have shown signs of softening more recently.

Federal Reserve policy will remain the variable most likely to move the housing market in the months ahead. Any further easing in mortgage rates could unlock some of the supply currently held back by the lock-in effect and give buyers modest relief, while sustained rates near current levels would likely keep the market's regional divergence intact, with slower-growth cities in the West and Sunbelt continuing to see prices flatten or dip even as Northeastern and Midwestern markets record steady gains. The next Case-Shiller release, covering July data, is expected in late September.