Most US metro areas saw home prices rise in Q3, but affordability remains a challenge
Nearly eight in 10 United States metro areas saw home prices rise in the third quarter of 2025, as the market continued to grapple with affordability pressures and uneven regional trends.
According to the National Association of REALTORS® (NAR), 77% of metro markets, or 176 out of 230, posted price gains, up from 75% in the previous quarter. However, only 4% of metros recorded double-digit price jumps, down from 5% in Q2, signaling a moderation in the pace of increases.
NAR chief economist Lawrence Yun said, “Home sales have struggled to gain traction, but prices continue to rise, contributing to record-high housing wealth. Markets in the supply-constrained Northeast and the more affordable Midwest have generally seen stronger price appreciation.”
Yun added, “Price declines are occurring mainly in southern states, where there has been robust new home construction in recent years. Given the region’s faster job growth, these price drops should be viewed as temporary and as a second-chance opportunity for those previously priced out of the market.”
Regional disparities in price growth
The national median single-family existing-home price grew 1.7% year over year to $426,800, matching the annual pace seen in Q2.
Regionally, the Northeast led with a 6% increase to $540,100, while the Midwest saw a 4.2% rise to $331,100. The South posted a modest 0.5% gain to $372,800, and the West was essentially flat, down 0.1% to $633,900.
The list of the most expensive markets remained dominated by California, with San Jose-Sunnyvale-Santa Clara topping the chart at $1.9 million, up 0.8% year over year.
Other high-priced metros included Anaheim-Santa Ana-Irvine ($1.4 million) and San Francisco-Oakland-Hayward ($1.3 million). Notably, Bridgeport-Stamford-Norwalk, Conn., was the only non-California market in the top 10, with a median price of $844,900, up 7.8%.
Affordability remains a sticking point
Affordability continued to be a headwind for buyers. The typical monthly mortgage payment for an existing single-family home with a 20% down payment was $2,187, down 2.8% from the previous quarter but up 2.1% year over year. On average, families spent 24.8% of their income on mortgage payments, a slight improvement from last quarter but still elevated.
Kimber White returned as president of NAMB with a clear mission. He aimed to tackle housing affordability by urging changes to loan-level price adjustments and calling for practical government solutions to help first-time buyers.https://t.co/ytWiY2eOP1
— Mortgage Professional America Magazine (@MPAMagazineUS) November 4, 2025
First-time buyers faced even steeper hurdles, with monthly payments on a typical starter home ($362,800, 10% down) at $2,146, representing 37.4% of their income. While this was down from 38.6% in Q2, it underscores the persistent affordability gap.
With 23% of markets seeing price declines—down slightly from 24% last quarter—analysts are watching for signs of a broader market shift. While Yun characterized some southern price drops as “a second-chance opportunity,” the overall landscape remains challenging for buyers, especially those entering the market for the first time.
NAR recently revealed that the share of first-time homebuyers in the US plummeted to a historic low of 21% over the past year, while the median age of first-time homebuyers entering the market soared to 40.
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