- Year-over-year price growth continues its downward trend, only rising 1.2% in September 2025.
- Connecticut, New Jersey, Alaska, West Virginia, and Wyoming saw the highest year-over-year price growth this month. Washington D.C. and Florida saw home prices dip the most.
- Despite September’s 0.2% monthly decline, Newark, NJ; Allentown, PA; Albany, NY; Omaha, NE; and Boise City, OK saw monthly increases firm up in September, up about 1% from the prior month.
Cotality™, a leader in property information, analytics, and data-enabled solutions, released its Home Price Index™ for September 2025. In September, price growth was 1.2% year-over-year. Home prices across the country are dropping as inventory reached its highest level since 2019. While the Northeast is still showing strong market signals, other regional differences are becoming apparent.
Northeastern states are maintaining strong housing fundamentals, which has led to continued home price growth in the high single digits. However, western states like Alaska and Wyoming are showing a turnaround and posted home price growth this month. Both states had year-over-year gains above 5%. However, at the metro level, more areas are seeing depressed prices. In September, 20% of the 411 U.S. metropolitan areas saw annual price drops. This is the largest share of metros with declines in price growth since June 2023, when surging mortgage rates significantly cooled home prices.
“Much like the K-shaped trend seen in overall consumer spending—driven largely by higher income groups—lower-income potential homebuyers are facing challenges due to an uncertain job market, sluggish wage growth, and worsening financial conditions. This is leading to weaker demand for homes and downward pressure on prices,” said Dr. Selma Hepp, Cotality’s Chief Economist.
Although recent declines in mortgage rates and the moderation in housing prices have slightly improved affordability, cost remains the primary obstacle for many prospective homebuyers. Notably, 75% of the top 100 housing markets are still considered overvalued, according to Cotality’s HPI. Also, while more for-sale homes offer more options, the 72% increase in real mortgage payments (exclusive of insurance and taxes) puts homeownership out of reach for many.
“Major Northeastern metro areas such as Boston, New York, and Philadelphia remain resilient thanks to sectors like finance, biotech, healthcare, and education. Strong and diversified local job markets continue to draw high-earning professionals and give them the income stability needed to purchase expensive homes. Additionally, many of these regions have nearby, mid-sized metros that are more affordable; these areas are increasingly popular with hybrid workers and high-income commuters seeking better value. Although recent declines in mortgage rates have provided support for housing activity, broader improvements in demand will depend on the strength of the labor market and corresponding consumer confidence.”
The next Cotality Home Price Index will be released on December 2, featuring data for October 2025. For ongoing housing trends and data, visit the Cotality Insights blog: www.cotality.com/insights.
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