U.S. home prices continued to rise in October, albeit at a much slower rate than before, continuing a cooling trend that’s been underway all year, Cotality said.

Annualized price growth slowed from 3.4% at the beginning of 2025 to 1.1% in October — the slowest pace since early 2012, Cotality noted in its monthly U.S. Home Price Insights report.

“The housing market in 2025 demonstrated remarkable resilience despite significant headwinds,” Chief Economist Selma Hepp said. “Slowing price growth reflects a much-needed rebalancing after years of unsustainable gains. While some markets are experiencing declines, these adjustments will help restore affordability over time and make housing more accessible to a wider group of buyers.”

Geographically, trends varied widely. The 30% surge in pricing that took place in Florida and the Southeast in 2022 is long gone; cities in Florida and Texas account for nine of the 10 coolest markets in the country, Cotality said.

Meanwhile, the hottest markets are those that did not see the dramatic run-up in home prices during the pandemic. Eight of the top 10 hottest markets are in the Midwest.

“Looking ahead, regional differences will remain pronounced, with demand favoring areas that offer both economic opportunity and relative affordability,” Hepp said. “In general, home price growth is projected to remain below the long-running average of 4% to 5%. However, mortgage rates will play a critical role in shaping the 2026 housing market. A notable drop in mortgage rates combined with low supply could lead to a re-acceleration of price gains.”