Annual Home Price Growth Ends 2025 at 1.3%–Weakest Since 2011

(Image courtesy of Nico C/pexels.com)

The 2025 housing market ended with the weakest annual appreciation since the market bottomed out in 2011 following the Great Recession, according to the S&P Cotality Case-Shiller Index.

The report, released Feb. 24, said buyers and sellers “remain at an impasse” as potential homebuyers are unable or unwilling to meet the current listing prices. Annual growth remained steady at 1.3% in December, according to the S&P Cotality Case-Shiller Index.

On a month over month basis, the non-seasonally adjusted index declined 0.3%, sitting 0.3% below its pre pandemic average.

“2025 marked the end of an unprecedented period of price growth,” said Thom Malone, principal economist at Cotality. “Following a five-year run of gains–including the 19% peak in 2021–growth fell to a mere 1.3% in 2025.”

Malone said the market is now waiting for the broader economy to catch up. While a correction in 2026 is possible to realign the two, the more likely scenario is a year of only nominal price growth.

There is currently a significant gap between seller expectations and buyer affordability, Cotality noted. “Many homeowners are choosing to de-list and wait for more favorable conditions rather than lower their asking prices. As a result, the market is set to remain stagnant, with slow price growth and low sales volumes for the time being.”

“Eventually, personal circumstances will necessitate sales, and potentially lower mortgage rates could provide a modest boost to activity in 2026. However, a full recovery in housing market momentum is unlikely until the broader economy catches up with the significant price gains from the earlier part of the decade—a process that will likely be gradual,” the report concluded.