Home Price Growth Stalls Near 1% As Local Divide Widens

U.S. home-price growth stalled near 1% for the third consecutive month in July, complicating expectations that slowing inventory gains would push appreciation higher during the second half of the year.

Home prices increased 1% from July 2025 but declined 0.5% from June on a non-seasonally adjusted basis, according to the latest Home Price Index from First American Data & Analytics.

The annual increase was slightly below the 1.2% pace recorded a year earlier. First American left its previously reported 0% monthly change from May to June unrevised.

The national figure points to neither a meaningful rebound nor a broad correction. Instead, it shows a housing market where weak demand is colliding with sharply different levels of available inventory.

“Annual house price appreciation nationally held at approximately 1 percent in July, the third consecutive month at roughly this pace, as housing supply and demand remain locked near a stalemate,” First American Chief Economist Mark Fleming said.

“The strong inventory gains from earlier this year have largely leveled off, while affordability challenges continue to limit demand,” Fleming added. “For now, neither buyers nor sellers have enough leverage to break the stalemate to push prices decisively higher or lower.”

Acceleration Fails To Materialize

July’s results temper the momentum seen in First American’s previous report.

In June, annual appreciation reached 0.9%, its fastest pace since August 2025, after accelerating for a second consecutive month. At the time, Fleming said home-price growth could continue gaining momentum if inventory stopped improving and demand held steady.

NMP reported that the June data showed home-price growth accelerating as inventory gains slowed.

One month later, annual growth is technically higher at 1%, but First American now describes the national market as having remained near the same level for three months. The distinction matters: slowing inventory growth has not yet been enough to overcome affordability constraints and weak buyer demand.

That demand weakness was evident in separate July data from Redfin. U.S. home sales fell 4.1% from June to their lowest seasonally adjusted level in nearly two years, as purchase demand splintered across local markets.

Yet fewer sales have not translated into falling prices nationally. The correction is occurring selectively in markets where buyers have more inventory and leverage.

Austin And Chicago Move In Opposite Directions

Chicago recorded the strongest annual appreciation among the 30 metropolitan areas tracked by First American, with prices rising 6.4%.

Pittsburgh followed with a 5.1% increase, while prices rose 4.6% in New Brunswick, New Jersey; 2.9% in Los Angeles; and 2.8% in Baltimore.

At the other end of the market, Austin recorded the largest annual decline at 2.9%. Prices fell 2.5% in Dallas and 1.9% in Tampa, Denver, and Oakland.

“The national picture may be one of roughly flat house prices, but price trends in local markets vary significantly based on supply and demand dynamics,” Fleming said.

“In markets such as Austin, Texas, inventory remains elevated and prices continue to decline, even as inventory growth has recently turned negative,” he continued. “Chicago is nearly the mirror image: inventory remains constrained and prices are rising, even as inventory gradually improves.”

The divergence widened from First American’s June report. Chicago’s annual appreciation increased from 6.2% to 6.4%, while Austin’s decline deepened from 1.4% to 2.9%.

Denver improved from a 2.6% decline in June to a 1.9% decrease in July but remained among the five weakest markets in the index.

“Whether prices rise, fall or remain flat ultimately depends on how much inventory a market has and where that inventory is headed,” Fleming said.

Starter-Home Pressure Persists In Tight Markets

The strongest starter-tier appreciation occurred in New Brunswick, where prices rose 6.8% annually. Starter-home prices increased 6% in Pittsburgh, 4.7% in Baltimore, 3.8% in Chicago, and 3.7% in Minneapolis.

Chicago’s overall appreciation, however, was driven more heavily by the upper portions of its market. Mid-tier prices rose 6.1%, while luxury prices increased 6.6%.

The price-tier differences reinforce a theme in NMP’s previous First American coverage: Metro-level averages alone are not enough to describe the market a borrower is entering. Geography, available inventory, and price tier can create materially different negotiating conditions, even within the same metropolitan area.

For originators, a 1% national appreciation rate offers little practical guidance. Buyers in Austin and Dallas may have greater room to negotiate prices, concessions, repairs, or rate buydowns. Borrowers in Chicago and Pittsburgh are still confronting appreciation that is several times the national pace.