National Market Index – September 2025

The September 30, 2025 release of the National Market Index, reporting on August 2025 data, shows the inflation-adjusted Home Price Index (HPI/CPI) at 1.0133. This reflects a -1.0% year-over-year decline and marks a modest step down from July’s 1.0160. The index has been slowly easing from the May 2022 peak of 1.0412, now standing -2.7% below that high. Even after thirty-eight months of correction, housing values remain 28.0% above the historical long-term average, a sign of how structural supply shortages, higher labor costs, and construction inflation have kept prices elevated well above pre-pandemic norms.

Between 2000 and 2020, inflation-adjusted values typically ranged between 0.60 and 0.80. Today’s 1.0133 reading means that national home prices are still 70.6% higher than January 2000. This shows that U.S. housing has permanently shifted into a more expensive era.

A comparison with the Great Recession highlights the resilience of the current cycle. From the March 2006 peak to the February 2012 trough, home values fell -35.2% over a 71-month period. In contrast, the correction that began in May 2022 has so far seen only a -2.7% decline over 38 months. The difference is stark: while the 2008 downturn was fueled by reckless lending and widespread foreclosures, today’s market is cushioned by stronger lending standards, tighter supply, and more stable consumer behavior. Affordability pressures remain severe, but the lack of mass distress sales has prevented a cascading decline.

Throughout 2025, home prices have moved gradually lower without volatility. The index started the year at 1.0324 in January and has slipped steadily to 1.0133 by August. The -1.0% annual change confirms that the market is still digesting the rapid double-digit gains of the pandemic years, normalizing rather than collapsing.

Turning to Austin, the market closely mirrors the national story in percentage growth over the long term but has faced a sharper correction from peak values. Since January 2000, inflation-adjusted prices in Austin have risen 68.5%, nearly matching the national increase of 70.6%. This long-run alignment shows that the city’s housing boom and correction are part of a broader national pattern. However, Austin experienced some of the steepest pandemic-era price increases, which has led to a deeper adjustment as those gains unwind.

For buyers, this environment provides more opportunity. Prices are below peak levels, and negotiating leverage has improved, but high mortgage rates still limit monthly affordability gains. For sellers, the easy days of automatic appreciation are over. Homes must be priced and presented competitively to attract offers, with condition and location playing decisive roles. For investors, the market no longer rewards speculation the way it did in 2020–2021. Forward-looking returns will rely more on rental yield, neighborhood fundamentals, and value-add strategies.

The September 2025 National Market Index makes clear that while housing values have slipped modestly from 2022 highs, the market is still historically expensive. Unlike the deep downturn of 2008, this correction remains shallow, supported by structural demand and limited supply. For Austin and the nation alike, the path forward points toward normalization, not collapse.​