Looking Back on a Year of Slow Growth

As 2025 comes to a close, housing industry experts are looking back at a year that was marked by slow price growth and lackluster sales activity. The year kicked off on a high note, with nationwide home-price growth posting an annual increase of 3.4% in January. However, by October, price growth slowed to just 1.1%, the lowest rate recorded since April 2012, according to housing market data provider Cotality.

Higher mortgage rates, ongoing affordability issues, and a rise in available homes for sale all played a part in the softer demand and slower price growth seen across the U.S. during 2025. However, activity still varied across local markets. Home-price declines expanded from six of the 100 largest metros in January to 32 by October. The metros with the largest price declines include Miami; St. Petersburg, Fla.; Rochester, N.Y.; Las Vegas; Seattle; and Dallas. Each of these metros saw prices declines of 6 percentage points or more as of October.

Even areas that did see appreciating price growth recorded muted gains. Appreciation trends among the top 100 metros varied widely. Rochester, New York led in January with a 9% annual increase, but by October, Bridgeport, Connecticut took the top spot with an 8% gain.

“Looking ahead, regional differences will remain pronounced, with demand favoring areas that offer both economic opportunity and relative affordability. In general, home price growth is projected to remain below the long-running average of 4% to 5%. However, mortgage rates will play a critical role in shaping the 2026 housing market. A notable drop in mortgage rates combined with low supply could lead to a re-acceleration of price gains."