Are Home Prices Still Going Up or Finally Slowing Down?

U.S. home prices remain resilient. According to new data released Tuesday by S&P Dow Jones and the Federal Housing Finance Agency (FHFA), both the FHFA Housing Price Index (HPI) and the S&P CoreLogic Case-Shiller Indices posted a 3.9% annual increase in February. This consistent gain is a positive signal for homeowners, but it also highlights a broader trend: the market is no longer surging as it did in previous years.

While the national increase shows continued demand, “price growth has moderated from the rapid increase seen in previous years.” This deceleration may offer a more balanced playing field for buyers and sellers alike.

Monthly Momentum Slows

On a monthly basis, the FHFA HPI reported only a 0.1% increase for February, with January’s growth revised slightly upward to 0.3%. Similarly, the U.S. National Composite Index from S&P showed a modest 0.3% monthly increase.

“Rather than broad declines, we are seeing a slower, more sustainable pace of price growth,” noted Nicholas Godec of S&P Dow Jones Indices. This measured growth is indicative of a market adjusting to ongoing affordability challenges and macroeconomic pressures.

Regional Shifts in Home Price Growth

Not all markets are created equal. The Middle Atlantic region saw the most significant annual jump at 7.0%, while the Pacific region — which includes California — had the slowest growth at just 0.9%. Among the 20 metro areas tracked, cities like New York (7.7%), Chicago (7.0%), and Cleveland (6.6%) led the pack.

Meanwhile, some formerly hot Sun Belt markets, such as Tampa, Miami, and Charlotte, showed flat or negative trends. “Several Sun Belt markets... showed flat or negative growth—underscoring shifting dynamics in regions that had previously seen rapid price increases.”

Mortgage Rates and Buyer Demand

High mortgage rates remain a barrier to homeownership. Even though they’ve pulled back slightly from their peak, rates are still hovering in the mid-6% range. “Even with mortgage rates remaining in the mid-6 percent range and affordability challenges lingering, home prices have shown notable resilience,” Godec said.

This is a key factor contributing to weaker buyer sentiment. A recent survey found that “70 percent believe now is a bad time to buy a home,” with many consumers hesitant due to high borrowing costs and economic uncertainties.

Inventory Woes Continue to Support Prices

Despite cooling demand, home prices aren’t falling — largely because supply is still tight. Many homeowners are reluctant to sell and give up low mortgage rates secured during the pandemic. This “lock-in effect” is keeping inventory constrained, which in turn supports home values.

As the report explains, “the resulting inventory shortage is helping to prop up home values in many areas.” For Orange County, where desirable properties are already limited, this dynamic may keep competition high even as buyer urgency softens.

Bottomline

If you're thinking about buying or selling in Orange County, the current market offers a unique window. Prices are still rising, but at a more manageable pace — giving buyers more breathing room and sellers continued equity gains. With inventory still tight and interest rates likely to remain steady in the short term, navigating this evolving market requires local expertise and strategy.

At Whitestone Real Estate, we specialize in helping you turn market trends into smart decisions. Whether you're moving up, downsizing, or relocating, our team is here to guide you through every step. If you’re ready to make your next move in Orange County, let’s talk — your dream home (or dream buyer) could be just around the corner.

Reference: Hammiel, R. (2025, April 29). Home prices climbed in February — but the momentum is cooling. Inman.