San Diego closed out last year as part of the shrinking club of U.S. cities with home price growth.
The San Diego metropolitan area’s home price increased 0.79% annually in December, according to the S&P Cotality Case-Shiller Indices report released Tuesday. That puts it at No.7 in the 19-city index, its highest showing in two years. Nearly half the cities on the index experienced annual price drops.
A home price rise of less than 1% is a far cry from past years. Prices had increased more than 11% to start 2024 in San Diego metro, which includes all of San Diego County.
Affordability challenges, driven by mortgage rates and sluggish wage gains, were cited by experts as reasons for a nationwide slowdown. However, there was a fair amount of variation among major metro areas. Prices in Chicago were up 5.34%, followed by New York metro at 5.08% and Cleveland at 4.02%.
Former pandemic boom towns seemed to be hardest hit. The Tampa metro area’s prices were down 2.85%, followed by Denver, down 2.06%, and Phoenix, down 1.53%. (Detroit was missing again in this report because of local recording issues).
“Markets that experienced outsized pandemic-era appreciation are now seeing more persistent normalization,” said Anthony Smith, a Realtor.com senior economist, “as inventory rebuilds and demand remains payment-sensitive.”
Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices, said the annual price increase for the nation was 1.3% — the weakest full-year gain since 2011.
“Two structural forces have reshaped the market over recent years: mortgage rates and inflation,” he said.
National inflation for 2025 was 2.7%, Godec said, which outpaced home price gains and essentially diminished home values. He said over the past decade, home price gains outpaced inflation by 3.7 percentage points annually. Godec said for many owners, the real home price returns (when inflation is factored in) turned negative last year.
“This marks a notable reversal,” he said.
The Case-Shiller index tracks repeat sales of identical single-family houses — and is seasonally adjusted — as they turn over through the years. It is often seen as a bellwether of the economy as a whole.
San Diego County’s median home price for single-family homes in December was $986,800, according to Attom Data Solutions. The median is the point at which half the homes sold for more and half for less.
Kara Ng, a senior economist at Zillow, said sluggish home price growth could work in favor of potential buyers.
“After years of worsening affordability, we’re seeing meaningful relief for homebuyers,” she said. “Home values have fallen for six straight months and are essentially flat from a year ago.”
Ng noted declining mortgage rates mean the buying power for shoppers increased in 2025. The average 30-year, fixed-rate mortgage rate was 6.15% in the last week of December, according to Freddie Mac. That was down considerably from the start of 2025, when average rates hit 7.04%.
A new affordability index from Zillow said San Diego County buyers can now afford more for a home purchase, but it still might not sound great. The Seattle-based company said a median-income household can afford a $477,000 San Diego home, which was up by $46,000 last year. Yet it only represents a sliver of the market: Just 11% of listed homes meet that criteria.
Annual price growth by metropolitan area
S&P/Case-Shiller Home Price Index, December 2025
Chicago: 5.34%New York: 5.08%Cleveland: 4.02%Minneapolis: 2.72%Boston: 0.95%Los Angeles-Anaheim: 0.87%San Diego: 0.79%Charlotte: 0.64%Washington, D.C.: 0.26%Atlanta: 0.14%San Francisco: -0.11%Seattle: -0.13%Las Vegas: -0.90%Portland: -1.11%Miami: -1.46%Dallas: -1.52%Phoenix: -1.53%Denver: -2.06%Tampa: -2.85%Detroit: N/A
National: 1.27%