After a strong start to 2025, the U.S. housing market showed signs of fatigue in July. World Property Journal reports that home price growth has cooled to its weakest point this year, hinting that the broader market may be turning a corner.
The S&P Cotality Case-Shiller National Home Price Index rose only 1.7 percent year-over-year in July, down from a much stronger pace earlier in the year. On a month-to-month basis (non-seasonally adjusted), prices actually slipped 0.2 percent, marking the first monthly decline of 2025.
Economist Thom Malone at Cotality notes that while some Midwest metros still benefit from relative affordability, many other regions are beginning to crack under rising costs. In particular, Western and Southern markets saw sharper declines: San Francisco prices fell 0.9 percent in a single month, one of the steepest drops among major metros.
This slowdown was widespread across market tiers. Low-, mid-, and high-tier home prices all dipped in July. Only a few metro areas—such as Cleveland and Chicago—were able to post gains in all tiers.
Adding pressure to sellers, inventory levels are beginning to rise. More listings mean buyers may have more choices, which could push sellers to consider price adjustments. Malone warns, however, that a dramatic market correction is unlikely without a major external shock.
What This Means for Buyers, Sellers, and the Market
For buyers who have been waiting for a chance, this cooling trend may offer opportunities in select markets. The erosion of price momentum gives more room for negotiation in areas where demand is softening.
For sellers, especially in overheated markets, patience may not always be an option. In regions where growth is stalling, setting realistic prices and being responsive to market signals will become more important than ever.
For the housing market at large, July may represent the start of a transition from rapid appreciation to a more stable, measured growth phase. In this environment, local fundamentals—job growth, income trends, and supply levels—are likely to drive which areas outperform.
Conclusion
The latest data from World Property Journal signals a cooling in what has been a white-hot housing market. With the national index rising just 1.7 percent year-over-year and many metros showing monthly declines, the momentum is clearly shifting. While the market is not collapsing, it’s entering a more delicate phase. For those buying, selling, or watching the market, the coming months could bring clearer signs of where housing is headed.
