Seventy-six of the 100 largest metros saw price appreciation over the previous four quarters
House prices in the United States rose 2.2% year-over-year through the third quarter of 2025, marking another quarter of steady appreciation, according to Federal Housing Finance Agency data released Tuesday.
The modest quarter-over-quarter increase of 0.2% suggests the market is maintaining equilibrium as it heads into year-end.
"The U.S. housing market has experienced positive annual appreciation each quarter since the start of 2012," the FHFA noted in its latest House Price Index report.
The gains reflect divergent regional trends. Forty-four states and the District of Columbia posted year-over-year increases, with Illinois leading at 6.9%, followed by New York at 6.8% and North Dakota at 6.3%.
However, six states experienced declines, with Florida down 2.3%, the steepest drop nationally.
Metropolitan areas showed similar variation. Allentown-Bethlehem-Easton, Pa.-N.J., posted the strongest growth at 9.7%, while Cape Coral-Fort Myers, Fla., experienced the deepest decline at 10.8%.
The Middle Atlantic census division led regional appreciation at 5.7% year-over-year, while the Pacific division posted a marginal 0.1% decline, the only major region failing to achieve positive growth.
The FHFA's comprehensive index tracks single-family home values across all 50 states and more than 400 American cities, drawing from tens of millions of home sales dating back to the mid-1970s.
While national appreciation remains steady, the divergence between high-growth northeastern markets and struggling Sunbelt metros underscores the importance of localized market analysis for mortgage professionals managing portfolio risk and origination strategy.
"From a broker perspective, I think they need to continue to focus on where their competitive advantage has always been,” Bruce Gehrke, senior director of wealth and lending intelligence at JD Power, told Mortgage Professional America.
“I think that's more local, that's more personal, face-to-face with the borrower. I think that's still an advantage that they have."
Gehrke added that borrowers don’t believe the process of homebuying is as easy as it used to be, largely due to the current market headwinds. According to the latest data collected by JD Power, young borrowers are concerned about how large house payments will affect their way of life.
Meanwhile, home price growth is expected to decelerate sharply. The Fannie Mae Home Price Index is forecast to rise just 1.3% in 2026, from 2024's 4.4% increase and 2025's projected 2.5% growth.
Slower price appreciation could unlock additional demand next year, but the pace remains constrained by affordability pressures that have persisted throughout 2024 and 2025.
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