Rising listings put pressure on prices, but regional divides deepen
Home prices across the United States continued to lose steam in September as inventory reached its highest level since 2019, according to new data from Cotality.
The firm’s Home Price Index showed national year-over-year price growth slowing to just 1.2%, down from 2.7% in September 2024 and well below the double-digit gains seen during the pandemic boom.
The number of homes for sale jumped 15% year-over-year, marking the largest increase in six years and giving buyers more options, but also putting downward pressure on prices.
The national median home price stood at $395,000, while the income required to afford a median-priced home hit $90,100—underscoring the affordability challenge for many buyers.
“Much like the K-shaped trend seen in overall consumer spending—driven largely by higher income groups—lower-income potential homebuyers are facing challenges due to an uncertain job market, sluggish wage growth, and worsening financial conditions. This is leading to weaker demand for homes and downward pressure on prices,” said Dr. Selma Hepp, Cotality’s chief economist.
Regional divides widen as Northeast outperforms
While the national picture points to cooling, the Northeast continues to stand out. Connecticut and New Jersey led the country in annual price growth, with both states posting gains in the high single digits.
“Major Northeastern metro areas such as Boston, New York, and Philadelphia remain resilient thanks to sectors like finance, biotech, healthcare, and education. Strong and diversified local job markets continue to draw high-earning professionals and give them the income stability needed to purchase expensive homes,” Hepp said.
This resilience is not universal. Western states such as Alaska and Wyoming, which had previously lagged, posted year-over-year gains above 5%. However, at the metro level, the picture is more mixed. In September, 20% of the 411 US metropolitan areas tracked by Cotality saw annual price drops—the largest share of metros with declines since June 2023, when surging mortgage rates first cooled the market. Washington D.C. and Florida saw the steepest declines.
Affordability remains a hurdle despite more options
Even with 30-year mortgage rates dropping to 6.8% in September from 7.1% in August, and prices easing, many buyers still struggled to afford a home.
“Although recent declines in mortgage rates have provided support for housing activity, broader improvements in demand will depend on the strength of the labor market and corresponding consumer confidence,” Hepp said.
Cotality’s data showed that 75% of the top 100 housing markets are still considered overvalued. Real mortgage payments—excluding insurance and taxes—have climbed 72% since before the pandemic, putting homeownership further out of reach for many.
While increased inventory is giving buyers more choices, it has yet to translate into widespread relief. According to the National Association of Realtors, the median existing-home price in September was $394,300, up 2.8% from a year ago, but the monthly payment on a typical home has risen to $2,200, compared to $1,280 in 2019.
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