S&P Home Price Index Rises 3.4 Percent in March Amid Tight Affordability

Limited housing supply and steady demand drove the increase, with New York City registering the biggest annual gain among 20 metros.

A property on the market in Washington, on May 19, 2025. Madalina Vasiliu/The Epoch Times

A key housing indicator rose by 3.4 percent year over year in March, a “slight decrease” from the 4 percent annual gain in February, S&P Global said in a May 27 statement.

On a month-over-month basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index registered a 0.8 percent increase in March before seasonal adjustments. The index measures changes in single-family home prices across all nine U.S. Census divisions.

“Home price growth continued to decelerate on an annual basis in March, even as the market experienced its strongest monthly gains so far in 2025,” Nicholas Godec, a product manager at S&P Dow Jones Indices, said.

According to him, the housing market is shifting from “mere resilience to a broader seasonal recovery.”

“Limited supply and steady demand drove prices higher across most metropolitan areas, despite affordability challenges remaining firmly in place,” Godec said.

Among the 20 metro areas tracked, New York City registered the highest annual gain in March, with prices up by 8 percent. Chicago and Cleveland registered the second- and third-highest gains.

Tampa, Florida, was the only metro to register a year-over-year drop, with prices dipping by 2.16 percent. The second-worst-performing metro was Dallas, which saw a marginal 0.19 percent annual gain.

According to Godec, while housing affordability continues to remain “severely constrained,” affordability did not worsen during the early part of 2025 because borrowing costs stabilized.

“Mortgage rates hovered in the mid-6 percent range throughout March, keeping monthly payment burdens near multi-decade highs relative to incomes,” he said. “This continued to weigh on buyer demand.”

However, Godec said that “persistent supply shortages helped counteract the headwinds.”

“Many existing homeowners remained reluctant to sell and give up low pandemic-era mortgage rates, and new construction activity stayed limited—a combination that kept inventory levels extremely tight,” he said.

In a May 27 post, real estate marketplace Zillow said the total number of homes listed in March was 19 percent higher year over year.

However, sales lagged during the month, resulting in the share of listings offering price cuts hitting the highest March level in six years, according to the company.

This trend continued in April, with 25 percent of homes listed on Zillow receiving a price cut, the company said in the post.

“[Buyers] now have more homes to choose from,“ Zillow stated. ”There are 1.2 million homes for sale in April—the most since August 2020. A price correction is expected to result in a modest recovery in sales over the coming year.”

Possible Trend Toward Affordability

Housing affordability could improve this year as home prices and mortgage rates potentially decline.

Redfin is predicting a 1 percent dip in prices by the end of 2025, citing higher inventory and fewer people interested in buying properties, the brokerage said in a May 22 statement.

“It’s a buyer’s market,“ Redfin stated. ”That means homebuyers in many parts of the country are able to successfully negotiate prices down, especially for fixer-uppers and/or homes that aren’t located in desirable neighborhoods.

“The longer the market is slow, the more sellers will come to terms with the fact that they can’t sell their homes for what they could have at the height of the market.”

Together with the 1 percent expected dip in home prices, wages are projected to keep rising at the current rate of roughly 4 percent, contributing to improved affordability.

As for mortgage rates, the average weekly rate on a 30-year fixed-rate mortgage has remained roughly in a range of 6.6 percent to 7.05 percent since the beginning of the year.

“Mortgage rates inched up this week but continue to remain lower than one year ago,” Sam Khater, chief economist at Freddie Mac, said in a May 22 statement.

“With more inventory for buyers to choose from than [in] the last few years, purchase application activity continues to hold up.”

Moving forward, rates are expected to drop to 6.1 percent by the end of this year, Fannie Mae said in a May 21 statement.

With lower home prices and mortgage rates predicted by year-end, many buyers who have been sitting on the sidelines could re-enter the housing market.