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While U.S. housing prices hit a record high last summer, inflation effectively erased those gains by the end of 2025.
National home prices last year climbed 1.3 percent, which was the weakest full-year increase since 2011, when housing prices fell by nearly 4 percent, according to the S&P Cotality Case-Shiller Index for December.
Last year’s annual gain was also well below the 10-year average increase of 5.2 percent — and that’s with the Covid-era homebuying rush of 2021 excluded.
Home prices steadily rose in the first half of the year, but then inflation outpaced home price appreciation in the back half, according to Case-Shiller. The end of 2025 saw inflation hover between 2.7 and just over 3 percent, above the Federal Reserve’s 2 percent target. The central bank attributed the rise to President Donald Trump’s tariff policies, which fueled economic uncertainty and triggered price increases.
On a month-over-month basis, U.S. home prices in December edged down 0.27 percent, more than four times the 0.06 percent monthly drop in November.
There also was a stark geographic divide as prices continued to climb in Northeast and Midwestern cities. Meanwhile, they fell in Sunbelt metros that had experienced population booms during the pandemic but are struggling to work through oversupply.
Of the top 20 cities, Chicago in December reported the strongest annual growth in its housing prices, of 5.3 percent, followed by New York (5.1 percent) and Cleveland (4 percent).
On the flip side Tampa posted the greatest price decline year over year, of 2.9 percent. Denver and Phoenix were next, with drops of 2.1 percent and 1.5 percent, respectively.
Combined, the top 20 metros saw housing prices rise at nearly the same annual rate as the entire country, by 1.4 percent.
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