Residential Real Estate News
U.S. Home Prices Go Flat in September as Inventory Climbs to Six-Year High
According to the latest Cotality Home Price Index, U.S. home price growth slowed to its weakest pace in nearly two years in September 2025, as rising housing inventory and cooling demand weighed on values across much of the country.
The index showed national prices up 1.2% from a year earlier, underscoring a market that is gradually losing steam. Total housing inventory reached its highest level since 2019, giving buyers more choices but also contributing to a moderation in price gains.
While the Northeast continues to defy the slowdown, with home values climbing at a high single-digit rate, other regions are seeing uneven performance. Alaska and Wyoming, which had lagged for much of the past two years, posted a surprise rebound with price gains above 5% year-over-year.
At the metro level, signs of weakness are spreading. About 20% of the 411 metropolitan areas tracked by Cotality recorded annual price declines in September -- the largest share since June 2023, when surging mortgage rates last cooled the market.
"Much like the K-shaped trend in consumer spending -- where higher-income households continue to spend while lower-income groups pull back -- today's housing market reflects widening affordability gaps," said Dr. Selma Hepp, Cotality's chief economist. "Weaker job growth, sluggish wages, and deteriorating household finances are dampening demand among lower-income buyers, putting downward pressure on prices."
Though mortgage rates have eased in recent weeks and home prices have softened in some markets, affordability remains a major hurdle. Cotality's analysis found that three-quarters of the top 100 housing markets remain overvalued, and real mortgage payments -- excluding taxes and insurance -- are up 72% from pre-pandemic levels.
Still, strength in the Northeast is propping up national averages. "Major metros such as Boston, New York, and Philadelphia remain resilient thanks to strong finance, biotech, healthcare, and education sectors," Hepp said. "These industries provide income stability and attract high-earning professionals who can sustain elevated home prices. Nearby mid-sized metros offering better value are also benefiting as hybrid workers look beyond city centers."
Analysts say that while the recent dip in borrowing costs could spark a modest pickup in demand heading into 2026, a broader recovery will likely depend on a steadier labor market and stronger consumer confidence.
