May 2025 MBS Highway Housing Index

The MBS Highway National Housing Index dropped six points to 42 in May 2025 as buyer activity levels fell in all regions, most likely as a result of broader economic concerns.

National Data

The MBS Highway National Housing Index in May 2025 fell 6 points month-over-month to 42, ending five consecutive months of gains. Unusually, the overall index has yet to break through 50 in 2025. As a reminder, an index level of 50 represents the breakeven point between contraction (<50) and expansion (>50).

The decline in the overall index was primarily driven by the Buyer Activity sub-index, which plunged 8 points (49 → 41). A year ago, this figure was 51. The 2025 spring selling season has so far been more subdued than last year, and new concerns regarding tariffs (“Liberation Day” on April 2) and economic growth (-0.3% GDP in 1Q 2025) seem to be weighing on consumer sentiment and transaction volumes.

The national Price Direction sub-index dropped 4 points to 42. A year ago, this figure was significantly higher, at 64. This gap is consistent with slowing, but still positive, price growth at the national level.

Regional Data

In May 2025, Buyer Activity levels fell in all seven regions, with the largest decreases seen in the West (-13 to 37) and Southwest (-10 to 34). The Southeast (-3 to 32) and Southwest remained the least active regions. Only the Northeast (-8 to 61), Midwest (-1 to 57) and Mid-Atlantic (-6 to 53) regions managed to keep their Buyer Activity sub-indexes above the 50 breakeven point.

Four of the seven regions also saw their Price Direction sub-indexes fall, though the magnitude of the decline was generally less pronounced than for Buyer Activity. Only three regions remained in expansion territory: Northeast (-6 to 70), Mid-Atlantic (+3 to 66), and Midwest (-3 to 61). Last year at this time, all seven regions had Price Direction sub-indexes >50.

QOTM: What’s Your 2025 Forecast for Home Prices in Your State?

After incredible home price growth in 2020 (+11% according to Case-Shiller) and 2021 (+19%), national home price growth has been steadily decelerating (+6% in both 2022 and 2023, and +4% in 2024). But that masks a wide range of outcomes at the state and city level, driven by local supply/demand dynamics and relative price levels.

That’s why in May, we asked our survey respondents:

How much do you expect home prices will rise in your state in 2025? Possible answers:

• Decline
• +0 to 3%
• +3 to 5%
• >5%

Results
Overall, 54% of respondents expected prices to rise 0–3%, with another 29% forecasting 3–5% price growth. 12% forecast a decline. 5% forecast greater than 5% price growth. Weighting the responses, that works out to a national ‘consensus’ forecast of around 2% price growth in 2025.

But things get interesting when you drill down to the regional level. 28% of respondents in the Southeast and 13% in the Southwest expect home prices will decline in 2025. Meanwhile, in the Northeast, 44% believe that home prices will rise by 3-5%, and another 7% see more than 5% price growth.

On a weighted basis, the survey responses suggest the following ‘consensus’ forecasts for home price growth, by region:

Southeast: 1.1%
Southwest: 1.8%
Midwest: 2.5%
West: 2.5%
Northwest: 2.5%
Mid-Atlantic: 2.5%
Northeast: 3.0%

Note: MBS Highway forecasts 4.0–4.5% price growth in 2025. With national inventory levels still ~16% below pre-pandemic levels (and supply much tighter in regions like the Northeast and Midwest), we believe that appreciation will continue to surprise to the upside.