S&P Dow Jones Indices (S&P DJI) has released the December 2025 results for the S&P Cotality Case-Shiller Indices.
“With December’s results, we can now assess 2025’s full-year performance in historical context,” said Nicholas Godec, CFA, CAIA, CIPM, Head of Fixed Income Tradables & Commodities at S&P Dow Jones Indices. “National home prices grew just 1.3% for the year — the weakest full-year gain since 2011, when prices fell 3.9%, and 5.3 percentage points below the 6.6% 10-year annual average. Even excluding 2021’s near-20% Covid-era surge, the 10-year average annual gain stands at 5.2%, still 3.9 percentage points ahead of this year’s result.”
Nationally speaking, inflation outpaced home price appreciation from June 2025 onward, eroding real home values through year-end and reversing a decade-long trend of positive real returns.
For the Seattle metro area, which comprises King, Snohomish, Pierce, and Kitsap Counties (recording resales of existing single-family homes and excluding condominiums and new construction of all property types), the data collected from Trendgraphix largely echoes the report by S&P Cotality Case-Shiller Indices.
Specifically of note, inventory levels were up nearly 33% (greater selection and opportunity for negotiation), while pending sales spiked almost 15%, compared with the year-to-date data available compared to the prior year.
Despite the notable disruptions of 2025, including tariffs, political uncertainty, rising inventory levels, and persistently elevated mortgage rates, home values across our region demonstrated remarkable resilience, effectively establishing a new pricing floor. While last year’s anticipated Spring Sales Season never fully materialized, early indicators in 2026 suggest a meaningful shift in momentum for the year ahead. Preliminary trends point to modest but measurable gains in both sales volume and pricing as buyer confidence returns and pent-up demand engages a more balanced marketplace. This renewed activity is setting the stage for a healthier and more sustainable growth cycle, with the current Spring Sales Season already outperforming last year’s results. As we look ahead, the data supports cautious optimism that 2026 will deliver steady appreciation and improving transaction velocity, reinforcing the long-term strength of our housing market.
In a recent Market Perspectives podcast hosting Jolene Messmer, a Loan Originator for Movement Mortgage, we learned that applications and prequalification letters in January 2026 increased more than 260%, and momentum is increasing in February as pent-up demand for buyers practicing wait-and-see in recent years, are now increasingly moving forward with confidence.
“I cancelled my family vacation in March,” said Messmer. “A year ago, mortgage rates were around 7%, and a year later we’re closer to 6%. We are responding to a significant change in consumer behavior.”
That mindset is only exasperated now that more recent mortgage rates are now below 6%, triggering more reason to make a move, especially as fresh inventory is coming to market, sellers are more realistic with pricing, and open house activity is significantly increased with numerous reports of multiple offers again.
“Two structural forces have reshaped the market over recent years: mortgage rates and inflation,” Godec continued. “The 30-year mortgage rate closed 2025 at 6.2%, well above the 4.8% 10-year average and a sharp contrast to the 3.9% average that prevailed from 2016 through 2020. Meanwhile, annual inflation for 2025 came in at 2.7% — modestly below the 3.1% 10-year average — but still outpaced home price appreciation by 1.4 percentage points, effectively eroding real home values for most owners. This marks a notable reversal: Over the prior decade, national home prices outpaced inflation by 3.7 percentage points annually, a dynamic that has quietly reversed, with real home price returns turning negative in June 2025.”
Consumers are reminded that the S&P Cotality Case-Shiller Indices are in headlines today, reporting as of December 2025. So, while this caps off the full year of data and illustrates important tends, the current market conditions can change significantly, and regional housing market conditions vary by product type and price point, accordingly. Looking forward, buyers are sensing pricing stability and preferred selection with an increasing concern about mounting competition and a return to accelerating home price growth, especially as global visibility in the Seattle metro area is anticipated following the 2026 Super Bowl Championship and approaching FIFA World Cup. We are reminded that demand can rise quicker than supply, especially as replacement cost of housing currently exceeds asking prices.
For the latest market information, contact a Global Real Estate Advisor with Realogics Sotheby’s International Realty.
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Information was obtained from sources deemed reliable but cannot be guaranteed. Readers are encouraged to perform independent due diligence before acting upon data or opinions provided herein. E&OE.