National Market Index – August 2025

The August 26, 2025 update to the National Market Index shows the inflation-adjusted Home Price Index (HPI/CPI) at 1.0151, reflecting a -0.8% year-over-year decline. While this marks another step down from the May 2022 peak of 1.0411, it still leaves national housing values sitting +28.4% above the long-term historical average. The elevated baseline underscores how structural supply shortages, labor costs, and construction inflation continue to keep prices higher than pre-pandemic norms.

For perspective, between 2000 and 2020, inflation-adjusted values typically ranged between 0.60 and 0.80. Even after nearly three years of correction, the current level of 1.0151 means national home prices remain roughly 70.9% higher than January 2000—a powerful illustration of how housing has shifted into a permanently more expensive range.

Comparing Market Cycles: 2008 vs. 2022

One of the clearest insights from this update comes from comparing the two most significant corrections of the past 25 years. 2006 Peak to 2012 Trough: Home values dropped -35.23% over a painful 71-month drawdown during the Great Recession. 2022 Peak to Present: Since the May 2022 high, values have retreated just -2.5% over 37 months, a far shallower adjustment. This sharp contrast highlights today’s market resilience. Unlike the 2008 collapse, which was driven by over-leveraged lending and a wave of foreclosures, the current environment is marked by tighter underwriting standards, undersupplied inventory, and more disciplined consumer demand. While affordability remains a challenge, the housing market has avoided the cascading failures that triggered the last major crash.

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

Price action in 2025 has been muted compared to the volatility of recent years. Month-over-month: The index has drifted lower since spring, with values easing from 1.0327 in January to 1.0151 in June, before stabilizing in midsummer. Year-over-year: The -0.8% annual change signals that national housing is still digesting the pandemic-era run-up, when prices were climbing at double-digit annual rates. This moderation reflects the broader process of normalization, as the market moves away from the unsustainable surge of 2020–2022.

Long-Term Affordability Index

Historically, the inflation-adjusted index has averaged 0.785 with a median near 0.763. The current reading of 1.0151 is still well above those benchmarks, but the trendline is moving gradually back toward more sustainable levels. For buyers, this drift is meaningful—it suggests affordability is slowly improving compared to peak valuations. Yet elevated mortgage rates offset much of the relief, keeping monthly payments high even as prices soften. Sellers, on the other hand, need to recognize that buyers now have leverage, and homes priced aggressively are sitting longer and often facing reductions. The Austin market mirrors the national picture closely. Since January 2000, inflation-adjusted prices in Austin are up 69.1%, nearly identical to the national gain of 70.9%. This parallel underscores that the housing boom and correction are broad-based, not isolated to a handful of metros.

Implications for Buyers, Sellers, and Investors

Buyers benefit from a modest pullback in values and more negotiating room, though affordability is still constrained by financing costs. 
Sellers should adjust expectations: pricing strategy, presentation, and condition matter more than ever, as the days of automatic appreciation are over. Investors face a market where future returns will be less about passive equity growth and more about fundamentals—rental yield, location, and value-add opportunities.

Bottom line: The National Market Index shows that while values have cooled slightly from their 2022 peak, housing remains historically expensive on an inflation-adjusted basis. Unlike the deep downturn of 2008, today’s correction has been shallow, underscoring the structural strength of housing demand against a backdrop of limited supply.\

Scroll down to view the full National Market Index PDF released August 26, 2025.​