Recent data show cooling U.S. home price growth is opening up more favorable conditions for homebuyers, especially in markets that overheated during the pandemic boom. The latest S&P Cortality Case-Shiller Index reports that U.S. home prices rose just 1.9% year-over-year in June 2025, down from 2.3% in May. Meanwhile the Consumer Price Index showed inflation at about 2.7%, meaning home prices are no longer keeping pace with general price increases.
What This Means for Buyers and Agents
- More negotiating power
In many formerly hot markets—especially in the Sun Belt and coastal regions—buyers are finding more homes lingering on the market. Some sellers are reducing prices, offering incentives, or facing longer time on market. - Better affordability
Slower price growth, lower home-value increases, and easing supply constraints in some areas are helping affordability. When price growth falls below inflation, as it has recently, buyers are more protected from overpaying. - Location matters more than ever
The cooling is uneven. In parts of Texas, Florida, Arizona, and the Mountain West, homes are seeing year-over-year price declines. By contrast, some Northeast and Midwest markets still show modest growth, thanks to tighter supply and stronger economic fundamentals. - Opportunity for first-time buyers and movers
Buyers who have been priced out may now re-enter the market. The lessened pressure from bidding wars, the availability of homes, and possible price cuts can make moving or buying a first home more feasible. Realtors can help by focusing on neighborhoods with rising inventory and good schools or amenities.
What Realtors Should Do
- Highlight value zones: Focus marketing on neighborhoods where price growth has cooled, but amenities and demand are still strong. Buyers look for value and potential resale.
- Monitor mortgage rates: Although home-price growth is cooling, rates above 6% still strain affordability. If rates dip, buyers looking from the sidelines could jump in.
- Educate clients on total costs: With slower growth, some buyers need help understanding carrying costs—taxes, maintenance, insurance—so they can assess whether lower home value increases compensate for other costs.
- Use data local to clients: National averages are useful, but metro- or county-level data often differ sharply. Some places are seeing price drops, others still have constrained inventory. Realtors who share local trends build trust.
