The pace of U.S. home-price growth fell below the rate of inflation for the first time in years in June, as the once-booming Sunbelt and West regions swapped places with the formerly lagging Midwest and Northeast, S&P Dow Jones Indices said. 

“This reversal is historically significant: During the pandemic surge, home values were climbing at double-digit annual rates that far exceeded inflation, building substantial real wealth for homeowners,” said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. “Now, American housing wealth has actually declined in inflation-adjusted terms over the past year — a notable erosion that reflects the market’s new equilibrium.” 

The S&P Cotality Case-Shiller U.S. National Home Price Index rose 1.9% year over year in June, down from the 2.3% annual gain measured in May. Month over month, the index rose 0.1%. 

The 10-city composite index rose 2.1% year over year, down from a 3.4% increase in May, while the 20-city composite also rose 2.1%, down from 2.8% in May.   

In Phoenix, home prices dipped 0.1% year-over-year in June, down from a 0.9% gain in May. 

“The regional rotation from Sun Belt to traditional industrial centers likely reflects more sustainable fundamentals — employment growth, relative affordability and demographic shifts that favor established metros over speculative markets,” Godec said. “While this represents a loss of the extraordinary gains homeowners enjoyed from 2020-2022, it may signal a healthier long-term trajectory where housing appreciation aligns more closely with broader economic fundamentals rather than speculative excess.”