Are Home Prices Finally Starting to Cool Off?

For years, home prices seemed like they could only go one direction: up. But fresh data suggests we might be entering a turning point, and for both buyers and sellers, that could mean a shift in strategy.
Let’s unpack what’s really happening in the housing market right now and what it means for your next move.

Price Growth is Slowing

In June, home prices across the country were up 2.0% compared to last year, according to CoreLogic. That is slightly lower than the 2.2% increase in May. Two other major reports, the FHFA and Case-Shiller indices, show similar results.
The bigger news is that monthly growth nearly stopped. In June, prices rose just 0.03%, compared to 0.3% in May. Because of this slowdown, CoreLogic has lowered its 2025 forecast from a 3% increase to no growth at all. That means some areas could even see prices drop in the months ahead.

Some Areas Are Cooling Faster Than Others

While national numbers are cooling, local markets tell a more dramatic story:

West Coast & Sun Belt : These regions are seeing the biggest declines, with 16 of the 20 largest cities reporting price drops over the last three months.
Midwest & Northeast : Still going strong, with cities like Buffalo and Indianapolis topping the charts for price gains in June.
Inventory Matters : Regions with flat or falling prices also tend to have much higher inventory levels, which is a sign of shifting power from sellers to buyers.

The Affordability Crunch

Even with signs of cooling, affordability remains a challenge: buying is currently cheaper than renting in just 1% of metro areas .
For many potential buyers, higher mortgage rates have been the main barrier. But if prices begin to slip and rates stabilize or dip, that equation could change—and quickly.

Construction Trends Won’t Solve Supply Overnight

In June, housing starts jumped 4.6% month-over-month, but permits edged down 0.1%. Meanwhile, residential construction spending fell across the board.
Translation? We’re not on track to build our way out of the housing shortage anytime soon. Inventory may still be tight in many markets, even if prices soften.

What This Means for You

If you are buying : Look for signs of more homes on the market and slower price increases. This could give you more negotiating power.
If you are selling : Consider listing sooner if your local market is starting to cool, to capture stronger prices.
If you are investing : Pay attention to regional differences. Midwest and Northeast markets may still offer steady growth potential.

At Luminate Bank , we watch these trends closely so our clients can make confident decisions. Whether you are getting pre-approved, using your home’s equity, or looking for the right mortgage program, we can guide you through your options.
Thinking about your next step? Talk with one of our mortgage specialists about your goals and the opportunities available in today’s market.

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Are Home Prices Finally Starting to Cool Off?

Are Home Prices Finally Starting to Cool Off?

Price Growth is Slowing

Some Areas Are Cooling Faster Than Others

The Affordability Crunch

Construction Trends Won’t Solve Supply Overnight

What This Means for You

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