The latest housing market data reveals a story of moderation. While headlines often focus on whether home prices are rising or falling, the more nuanced reality shows a market that’s transitioning from rapid appreciation to steadier, more sustainable growth patterns.
What the Latest Data Shows
Both major national home price indices released August data this week, and the message is consistent: prices remain higher than they were a year ago, but the pace of that growth continues to slow.
According to the FHFA House Price Index, the seasonally adjusted month-over-month change was +0.4% in August, with year-over-year growth at +2.3% compared to August 2024. The S&P CoreLogic Case-Shiller National Index showed even more modest gains, with year-over-year growth of +1.5%, down from +1.6% the previous month.
The national annual gain has eased to levels not seen in over two years. FHFA’s year-over-year growth represents one of the lowest annual rates since 2012, while Case-Shiller’s national pace is the weakest in more than 24 months.
Understanding What This Means
Here’s an important distinction: when we talk about “cooling” or “slowing,” this refers to the rate of appreciation, not the actual price levels themselves.
Think of it this way: If home prices increased by 10% last year and 2% this year, that’s a significant cooling of appreciation. But prices still went up—just more slowly. Current price levels remain near all-time highs, with only modest recent adjustments. This is nothing like the dramatic declines seen during the 2008-2009 period.
Month-Over-Month vs. Year-Over-Year Trends
The data becomes even more interesting when examining monthly changes. Seasonal patterns play a significant role in housing markets, with certain times of year typically showing predictable increases or decreases in activity and pricing.
The FHFA index uses seasonal adjustment methods to smooth out regular fluctuations, showing a steady +0.4% monthly increase. In contrast, the Case-Shiller index, which presents non-seasonally adjusted data, reveals the natural cyclical patterns that occur throughout the year, with a seasonally adjusted month-over-month change of +0.2%.
August represents one of the earliest possible months for annual price indices to bottom out, though this is relatively uncommon. More typically, seasonal rebounds occur later in the fall. Given normal reporting delays of approximately two months, it may be several weeks before we can assess whether this pattern holds for the current year.
Looking at the Bigger Picture
While monthly fluctuations provide interesting data points, the year-over-year perspective offers clearer insight into actual market trends. Both the FHFA’s +2.3% and Case-Shiller’s +1.5% annual growth rates represent significant moderation from the rapid appreciation seen in recent years.
This moderation suggests the housing market is moving away from the unsustainable appreciation rates of recent years toward more historically normal patterns. For context, the extraordinary conditions of 2020-2022 were anomalies driven by unique economic circumstances—not the typical state of housing markets.
What This Means for Housing Accessibility
The conforming loan limit—which determines which mortgages can be delivered to government-sponsored entities and typically receive more favorable terms—is updated annually based on quarterly FHFA data.
Current projections based on available data suggest the limit may increase from its present level of $806,500 to approximately $832,000 when announced next month. This adjustment reflects the continued elevation of home prices, even as the rate of appreciation moderates. The actual limit will be officially announced at the end of November.
The Takeaway
Housing markets are complex, and single data points rarely tell the complete story. What’s clear from the latest information is that the market is normalizing. Prices continue to rise year-over-year, but at a dramatically slower pace than during the peak appreciation years.
For those following housing trends—whether for personal planning or general knowledge—understanding the difference between price levels and appreciation rates is crucial. The current environment reflects neither a crisis nor a boom, but rather a market finding its equilibrium after several years of exceptional activity.
For informational purposes only.
Data sources: FHFA House Price Index and S&P CoreLogic Case-Shiller Home Price Indices, August 2025
