S&P Cotality Case-Shiller Index Reports Annual Gain in December 2025

Core Insights - The S&P Cotality Case-Shiller U.S. National Home Price NSA Index reported a 1.3% annual gain for December 2025, marking the weakest full-year gain since 2011, which saw a decline of 3.9% [1][2] - The market experienced significant geographic divergence, with Chicago and New York showing gains above 5%, while markets like Tampa, Phoenix, Dallas, and Miami faced steep declines [1][2] - Inflation outpaced home price appreciation from June 2025 onward, leading to a reversal of the previous decade's trend of positive real returns on home values [1] Year-over-Year Performance - The 10-City Composite Index saw a 1.9% annual increase, while the 20-City Composite posted a 1.4% increase, both down from previous months [1][2] - Chicago led the 20 cities with a 5.3% annual gain, followed by New York at 5.1% and Cleveland at 4.0%, while Tampa recorded the lowest return at -2.9% [1][2] Monthly Changes - The U.S. National Index experienced a pre-seasonally adjusted drop of 0.3%, while the seasonally adjusted index reported a monthly increase of 0.4% [1][2] - The 10-City and 20-City Composite Indices both decreased by 0.1% in the pre-seasonally adjusted data but showed gains of 0.5% when seasonally adjusted [1][2] Structural Market Forces - The 30-year mortgage rate closed 2025 at 6.2%, significantly higher than the 4.8% 10-year average and the 3.9% average from 2016 to 2020 [1] - Annual inflation for 2025 was recorded at 2.7%, which was below the 3.1% 10-year average but still outpaced home price appreciation by 1.4 percentage points [1] Market Dynamics - The first half of 2025 saw home prices rise by 2.6%, while the second half experienced nominal declines of 1.3%, with all 20 tracked metro areas posting negative returns in the latter half [1] - The divergence in performance reflects a broader reordering, with historically stable Midwest and Northeast markets outperforming the Sun Belt markets that surged during the pandemic [1]