Case-Shiller: U.S. Home Prices Rise in February as Tight Supply Supports Market

U.S. Home Prices Edge Higher in February Despite Affordability Headwinds

U.S. home prices continued their steady climb in February, with both the FHFA House Price Index and S&P CoreLogic Case-Shiller Indices showing modest monthly gains and resilient year-over-year growth, underpinned by tight supply conditions despite high mortgage rates.

National Prices Show Modest Gains

The FHFA House Price Index rose 0.1% in February following an upward revision of January’s growth to 0.3%. Annual appreciation stood at 3.9%. Regionally, monthly price changes ranged from a 0.8% decline in the Pacific division to a 1.3% rise in New England. All nine census divisions reported year-over-year gains, with the Middle Atlantic leading at 7.0% and the Pacific lagging at 0.9%​.

Case-Shiller Index Signals Cooling Momentum

The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index also showed a 3.9% annual increase in February, down from 4.1% in January. The 20-City Composite gained 4.5% annually, while the 10-City Composite rose 5.2%. Monthly gains were more pronounced: the 20-City Composite rose 0.7% before seasonal adjustment and 0.4% after, while the 10-City Composite increased 0.8% NSA and 0.5% SA. The national index rose 0.4% NSA and 0.3% SA​.

Regional Divergence Highlights Supply Imbalance

New York led all major metros with a 7.7% annual increase, followed by Chicago (7.0%) and Cleveland (6.6%). Tampa was the only city with a negative annual return, falling 1.5%. On a monthly basis, San Francisco (+1.8%), Seattle (+1.6%), and Los Angeles (+1.5%) led gains. Tampa, Miami, and Charlotte showed marginal declines or stagnation. These regional trends point to a bifurcated market where supply shortages keep prices firm in some metros while affordability caps growth in others​.

Affordability Still a Drag, But Supply Keeps Prices Supported

Despite mortgage rates holding in the mid-6% range and affordability remaining a key constraint, limited inventory continues to support prices. Buyers remain cautious, but sellers are still reluctant to give up low fixed-rate mortgages, keeping resale supply tight. Analysts note that much of the annual appreciation occurred earlier in the 12-month window, with recent months showing flatter performance​.

Market Forecast: Mildly Bullish Near-Term

Home prices are likely to continue their slow upward trend in the near term, supported by persistent supply constraints and stable—albeit cautious—demand. While the pace of appreciation is decelerating, the housing market remains resilient in most regions. Traders should monitor mortgage rate movements and regional supply data closely for directional cues.