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Home-price growth drops to lowest level in two years

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  Published in House and Home on Wednesday, October 1st 2025 at 0:59 GMT by HousingWire
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Home‑Price Growth Slows to Its Lowest Pace in Two Years, Says HousingWire

A recent HousingWire story – “Home‑Price Growth Drops to Lowest Level in Two Years” – dives into fresh data that reveals a sharp deceleration in the U.S. housing market’s expansion. The piece pulls from a blend of national price indices, median‑sale statistics, and expert commentary to paint a picture of a market that is still rising, but at a far more modest rate than analysts had expected.

The Numbers that Matter

The headline driver of the article is the S&P / Case‑Shiller U.S. National Home Price Index. In March 2024, the index posted a year‑over‑year growth of just 1.2 % – a stark drop from 1.9 % in February. That decline pushed the index’s pace of growth to its lowest level since early 2022, when the index hovered around 0.8‑1.0 % annually. The report notes that the 1.2 % figure sits well below the 3.5 % rise seen in January, underscoring a pronounced cooling trend.

The HousingWire article also highlights the National Association of Realtors’ (NAR) data on median sale prices. While the median price for a U.S. home climbed 0.4 % from February to March, the rise was half the 0.9 % growth reported in February. Moreover, when compared with the same period last year, the median price was up a modest 4.2 %, a far slower rate than the 6.5 % rise observed in March 2023.

These two data sets together illustrate a market that remains buoyant – prices are still climbing – but the rate of climb has slowed to a fraction of its previous pace.

Why the Deceleration?

A central theme of the piece is the impact of rising mortgage rates. The Federal Reserve’s dovish stance has nudged the 30‑year fixed mortgage rate to a new high of 6.3 % in March, up from 5.8 % at the start of the year. The article cites housing‑market analyst Dr. Lisa Morgan, who argues that higher borrowing costs have tightened affordability, causing some buyers to hold off or shift to lower‑priced regions.

Supply constraints also play a role. The report references a recent HousingWire study showing that the housing‑construction pipeline remains shallow, especially for single‑family homes. With builders still grappling with labor shortages and material price spikes, the limited supply keeps demand from drying out entirely – but it also stifles the kind of rapid price surges seen during the 2020‑2021 boom.

Another factor the article underscores is the shift in buyer sentiment. A brief poll of 400 prospective homebuyers, conducted by the National Association of Realtors in February, found that 63 % of respondents rated affordability as a “major” concern – up from 56 % in January. This shift signals that buyers are becoming more price‑conscious, thereby dampening the upward momentum of prices.

Market‑Specific Insights

The HousingWire story also zooms in on geographic variation. While the national trend shows a slowdown, several major metro markets – notably Phoenix, Austin, and Dallas – are still experiencing price growth above the national average, hovering around 2.5 % annually. In contrast, markets that were once price‑tough, such as San Francisco and New York, have seen growth rates dip below 1 %.

HousingWire also cites a recent report from the S&P / Case‑Shiller that broke down growth by region. The Midwest, for instance, recorded a growth rate of 1.0 %, a significant decline from 2.1 % in February. The article ties these regional differences to local economic factors: robust job growth in the South, versus a cooling manufacturing sector in the Midwest.

The Broader Economic Context

HousingWire does not limit its analysis to raw numbers. It frames the deceleration within the broader macroeconomic backdrop. The Federal Reserve’s continuing “tight‑monetary” stance – keeping short‑term rates near the 5 % range and signaling future rate hikes – is cited as a principal driver of mortgage rate growth. The article also notes that higher rates can reduce the present value of future mortgage payments, thereby nudging some buyers toward rental markets.

In addition, the piece draws attention to the potential spill‑over effects on related sectors. Lower home‑price growth can dampen construction spending, which in turn could influence employment in the building‑trade sector. At the same time, the slowdown may ease pressure on housing‑affordability metrics, potentially reducing the gap between median incomes and median home prices in some markets.

What to Expect Going Forward

The article concludes with a cautious outlook. While the slowdown in price growth may signal a cooling market, HousingWire’s data indicate that prices are still trending upward. “The housing market has always been resilient,” the writer notes, citing economists who argue that a slowdown is part of a natural cycle rather than a sign of an imminent crash.

HousingWire highlights that the next few months will be telling. If mortgage rates hold near the current levels and supply constraints persist, price growth could stabilize around the 1‑1.5 % range. However, a sudden Fed rate hike or a surge in new construction could either accelerate or further decelerate price growth.

In sum, the HousingWire article provides a nuanced, data‑driven snapshot of a market that is still growing but at a significantly slower pace than in the past two years. It reminds stakeholders that while the housing sector remains a cornerstone of the U.S. economy, the forces shaping its trajectory are evolving, and understanding those shifts is essential for anyone involved in real‑estate investment, development, or policy.