National Market Index – October 2025
The October 29, 2025 release of the National Market Index, reporting on September 2025 data, shows the inflation-adjusted Home Price Index (HPI/CPI) at 1.0116. This represents a -1.4% year-over-year decline and continues the gradual easing trend from earlier this year, down from August’s 1.0134 and July’s 1.0160. Now 2.8% below the May 2022 peak of 1.0412, national home prices are still 27.6% above the historical long-term average—a powerful indicator that housing remains structurally more expensive than any pre-pandemic era due to chronic undersupply, elevated construction costs, and persistent demand in key employment markets.
Between 2000 and 2020, inflation-adjusted home values typically oscillated between 0.60 and 0.80. Today’s reading of 1.0116 confirms that the U.S. housing market has permanently shifted into a higher-price regime, with prices now 70.6% higher than January 2000 levels. This new era is characterized not by volatility, but by elevated baseline values that reflect fundamental economic shifts rather than speculative excess.
Correction vs Collapse: A Tale of Two Downturns
The current correction continues to stand in stark contrast to the Great Recession. From the March 2006 peak to the February 2012 trough, U.S. home values fell -35.2% over 71 months. In the current cycle, which began in May 2022, values have experienced only a -2.8% decline over 39 months. The difference is dramatic and intentional: stronger lending standards, record homeowner equity, and limited distressed supply have prevented cascading price declines, transforming this cycle into an inflation and affordability normalization period rather than a credit-driven collapse.
This resilience does not mean conditions are easy. Affordability remains one of the most pressing challenges in U.S. housing history, with elevated prices colliding with mortgage rates that continue to suppress monthly payment capacity. But unlike 2008, when forced selling drove values down sharply, today’s sellers are largely discretionary—and many are choosing not to sell rather than accept discounts.
2025 Trend: Gradual Normalization
Throughout 2025, national home prices have followed a remarkably steady path of softening without volatility. The index started the year at 1.0322 in January and has eased each month to today’s 1.0116. This slow decline reflects the market digesting the pandemic-era surge, unwinding excess pricing without triggering widespread financial distress.
Prices are down modestly from peak levels
Mortgage rates continue to restrict demand
Supply remains historically constrained
No signals of systemic collapse
The narrative is not about falling prices—it’s about rebalancing.
Austin in Focus
Austin remains closely aligned with the national market when measured over the long term. Since January 2000, inflation-adjusted prices in Austin are up 68.6%, nearly mirroring the national increase of 70.6%. However, Austin experienced one of the most pronounced surges during the 2020–2022 cycle, leading to a sharper pullback as prices normalize. While still structurally higher than pre-pandemic levels, Austin’s price adjustment has created more negotiability and opportunity than the national average.
For Austin buyers, this presents the most favorable environment in years, with increased selection and reduced competition. For sellers, it reinforces the need for pricing precision, strategic presentation, and realistic expectations. For investors, the era of speculative appreciation is over. Future returns will be driven by yield, market fundamentals, and long-term economic anchors rather than rapid price inflation.
The Road Ahead
The October 2025 National Market Index reinforces the same message seen throughout the year: the U.S. housing market is normalizing, not collapsing. Prices are easing but remain historically elevated. Affordability is strained but supported by demographic demand and limited supply. While the market is in correction, it is not in crisis.
The coming months will be shaped by changes in interest rate policy, labor market strength, and consumer confidence. But one trend is clear: the era of double-digit annual price growth is behind us. The next phase will be defined by stability, equity preservation, and strategic opportunity—especially in markets like Austin, where the unwinding of pandemic-era gains is creating new entry points for buyers and investors who were previously priced out.
