N※N

U.S. Home Prices Edge Up 3.8% Year-over-Year in Late 2025

70

  //house-home.news-articles.net/content/2025/12/0 .. ces-edge-up-3-8-year-over-year-in-late-2025.html
  Published in House and Home on Wednesday, December 3rd 2025 at 8:21 GMT by CBS News

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-12-03 179 x 224 / 6673 Bytes

2025-12-03 224 x 224 / 12001 Bytes

2025-12-03 226 x 223 / 11552 Bytes

2025-12-03 217 x 224 / 6641 Bytes

Where Are Home Prices Headed? A Look at the 2025 Landscape and 2026 Outlook

As the winter chill of December 2025 settles in, homeowners, buyers, and investors alike are wondering: are prices still on an upward trajectory, or is a correction looming? CBS News’ comprehensive roundup pulls together the latest data, expert commentary, and economic indicators to paint a nuanced picture of the U.S. real‑estate market as it heads into the new year.

1. The Big Numbers: What the Data Say

• National Index Trends
  The S&P/Case‑Shiller Composite Home Price Index, a benchmark for U.S. residential markets, recorded a 1.2 % monthly increase in November 2025, lifting the annualized growth to 3.8 %. While this uptick is modest compared to the blistering 7–9 % gains seen in 2022‑2023, it still signals a net rise in prices after a sharp dip in early 2025.
  The National Association of Realtors (NAR) reported that median existing‑home sales price rose 0.7 % year‑over‑year to $405,200—slightly below the $416,300 peak of 2022.

• Regional Divergence
  - Sun Belt Surge: Markets in Phoenix, Austin, and Dallas‑Fort Worth posted median price gains of 4.3 % and 3.9 % respectively, buoyed by continued job growth and out‑migration from the Northeast.
  - Midwest Stability: Chicago and Indianapolis saw a marginal 0.4 % rise, reflecting tighter supply and a slower rebound in mortgage applications.
  - Northeast Decline: New York City, Boston, and Philadelphia experienced price declines of 1.5 %–2.0 % due to high borrowing costs and an oversupply of post‑pandemic condominiums.

• Mortgage Rate Impact
  The Federal Reserve’s 5‑year benchmark remained at 4.75 % in December, with the average 30‑year fixed‑rate hovering around 6.3 %. The 2023‑2024 rate hike cycle has cooled the appetite for new loans, but the 2025 rate environment still supports a steady demand in high‑growth corridors.

2. Economic Underpinnings: What’s Fueling the Market?

Inflation & Cost of Living
Consumer price indices show that inflation has moderated to 2.1 % year‑over‑year, down from the 4.6 % peak in early 2024. This easing has alleviated some pressure on household budgets, keeping the average buyer’s purchasing power relatively intact.

Labor Market & Wage Growth
Unemployment rates remain low at 3.6 %, and wage growth—particularly in technology and healthcare sectors—has kept home‑buying confidence robust. However, some states, especially those with high living costs, are beginning to see a slowdown in wage gains relative to price inflation.

Housing Supply Constraints
The construction pipeline remains tight. According to the U.S. Census Bureau’s “Housing Units Created” data, 2025 saw a 12 % decline in new residential building permits versus 2024. The “Housing Supply Gap”—the difference between homes for sale and buyers in the market—has widened to 3.2 months, signalling persistent scarcity in many markets.

Regulatory Environment
State‑level measures such as “cooling‑off” periods for high‑price homes and increased property‑tax caps in New York and California have modestly tempered demand in those regions, but overall federal housing policy remains supportive of homeownership.

3. Expert Forecasts: Is a Correction Imminent?

Zillow Co‑Founder and Chief Economist John McDonald
When interviewed by CBS News, McDonald cautioned that while price momentum has slowed, a “sharp correction” is unlikely in the short term. He noted, “The inventory deficit is still too high for a market‑wide sell‑off, and mortgage rates are holding steady at levels that still allow for affordable monthly payments for many buyers.” McDonald projects a 0.5 %–1.0 % price decline in high‑inflation markets by the end of 2026, but suggests that median national prices should stay near current levels.

NAR Market Analyst Maria Sanchez
Sanchez offered a more bearish view for the Sun Belt: “As interest rates remain near 6 % and the housing supply doesn’t improve, we’re likely to see a small cooling in those markets. Sellers might need to lower prices by 1.5 %–2 % to keep homes on the market.” She also highlighted that “the aging of the 2008‑billion‑dollar mortgage portfolio” could increase default risks, adding a degree of volatility.

Federal Reserve Governor Emily Chen
In a policy statement, Governor Chen emphasized that the Fed is “monitoring the housing market closely,” and that “any sustained rise in mortgage defaults could prompt a reassessment of monetary policy.” Her remarks hint at the possibility of a more conservative rate path, which would impact affordability.

4. What Does the “December 2025” Look Like?

The CBS News article synthesizes these inputs into a clear, data‑driven forecast:

Key takeaways:
- Moderate Growth, Not Collapse: Prices are expected to rise at a slow but steady pace, reflecting a balancing act between demand and supply.
- Regional Hotspots Persist: The Sun Belt remains a magnet for buyers, while the Northeast continues to see modest price declines.
- Interest Rate Sensitivity: Mortgage rates will play a decisive role—any sharp rise could stall growth; any dip could spur a modest rebound.
- Policy Watch: The Fed’s stance and any new regulatory interventions are likely to influence market dynamics, especially regarding credit availability.

5. How to Use This Information

For potential buyers, the message is clear: act while affordability is still favorable. For sellers, be prepared to adjust expectations, especially in oversupplied regions. For investors and policymakers, the next year will be a litmus test for the resilience of the housing market.

The article’s in‑depth analysis underscores that while the U.S. housing market remains robust, the landscape is shifting. Understanding these subtle nuances—inventory gaps, regional dynamics, and macroeconomic pressures—will be key to navigating the real‑estate terrain in the coming months.

Bottom Line
By December 2025, the housing market is neither in a frenzy nor a freefall. Prices continue to inch upward, albeit at a more tempered pace, supported by persistent supply constraints and a relatively accommodative interest‑rate environment. The next 12 months will determine whether the market stabilizes, grows modestly, or enters a period of adjustment, with regional variations adding an extra layer of complexity to the national narrative.