National Market Index – July 2025

The latest update to the National Market Index reveals that the inflation-adjusted Home Price Index (HPI/CPI) has declined slightly to 1.0200 as of July 29, 2025, down from a recent peak of 1.0411 reached in May 2022. This reading marks a -0.2% year-over-year change, signaling that national home values are stabilizing after several quarters of market correction. Even with this modest decline, today's housing prices remain +29.1% above the historical average, emphasizing the long-term elevation in real estate values due to supply constraints, labor shortages, and inflationary pressure on construction costs. Despite the recent cooling, the market still stands well above the 2000–2020 baseline, when inflation-adjusted home values typically fluctuated between 0.60 and 0.80. The current value of 1.0200 suggests that national home prices are roughly 71.7% higher than they were in January 2000, even after adjusting for inflation.

Comparing Market Cycles: 2008 vs 2022 Correction

The drawdown chart offers an essential comparison between the two major housing corrections of the past 25 years. The 2008 Great Recession saw a 35.23% decline over a 71-month drawdown from March 2006 to February 2012. In contrast, the current correction, which began in May 2022, has seen a comparatively shallow decline of -2.02% over 36 months. This difference suggests greater overall market resilience in the current environment. While affordability challenges remain high due to interest rates and consumer price inflation, national prices have not collapsed as they did in 2008. That’s largely due to tighter inventory, more qualified lending, and better balance between housing demand and supply.

Month-Over-Month and Year-Over-Year Trends

On a month-over-month basis, June and July of 2025 saw a minor rebound. June 2025: 1.0277. July 2025: 1.0299. This small increase reflects seasonal strength and localized price firming in select metro areas. However, the year-over-year trend remains slightly negative, signaling a broader pattern of normalization after the pandemic-era surge in home values. The market is digesting the rapid run-up between 2020 and 2022, when prices were rising at double-digit annual rates.

Long-Term Affordability Index

Historically, the inflation-adjusted HPI has hovered around 0.785 (average) with a median of 0.763. The current index of 1.0200 remains significantly higher, but the recent decline suggests the market is slowly drifting back toward long-term sustainable levels. While this does not imply a full return to pre-2020 pricing, it does indicate that housing is gradually becoming more accessible for new buyers compared to peak valuations. Notably, the Austin-area housing market has tracked closely with national trends, showing a 72.48% increase since January 2000 on an inflation-adjusted basis—nearly identical to the national trend of 71.74%. This parallel performance underscores the widespread nature of the housing run-up across diverse metro areas.

What This Means for Buyers, Sellers, and Investors

For buyers, the market correction means more negotiating power and a slight improvement in affordability compared to the peak of 2022. However, mortgage rates remain elevated, so price declines are being offset by higher financing costs. Sellers should recognize that while values remain historically strong, competition has increased. Pricing strategy and home presentation matter more now than they did in the frenzy of 2021–2022. Overpricing in today's market leads to extended days on market and inevitable price reductions. Investors, meanwhile, should take note of the flattening trend. The days of easy equity appreciation are behind us, and returns will likely depend more on rental yield, value-add strategies, and location-specific fundamentals than pure market momentum.

Scroll down to view the full National Market Index PDF released July 29, 2025.