Is affordability coming back within reach for homebuyers?
Fewer US metropolitan areas posted home price gains in the second quarter of 2025, with growth easing compared with earlier in the year, according to the National Association of Realtors (NAR).
Out of 228 metro markets, 170 — or 75% — recorded year-over-year increases in median single-family existing-home prices, down from 83% in the first quarter. Only 5% of markets posted double-digit growth, compared with 11% in the prior quarter.
The national median price for a single-family existing home reached $429,400, a 1.7% annual increase and the highest recorded by NAR. In the first quarter, the year-over-year increase was 3.4%.
Regional data showed mixed results: the Northeast posted a median price of $527,200, up 6.1%; the Midwest reached $328,800, up 3.5%; the West stood at $646,100, up 0.6%; and the South held steady at $376,300.
NAR chief economist Lawrence Yun attributed Midwest price gains to relative affordability and Northeast increases to limited supply.
“The South region – especially Florida and Texas – is experiencing a price correction due to the increase in new home construction in recent years,” Yun said.
Yun noted that job growth has outpaced housing activity, with more than 7 million net jobs added since before the pandemic, while home sales remain below pre-pandemic levels.
“The homeownership rate has fallen by a full percentage point since early 2023,” he said. “If interest rates decline, the strongest release of pent-up housing demand is likely to occur in states with significant job growth in recent years, such as Idaho, Utah, the Carolinas, Florida, and Texas.”
The metro areas with the largest year-over-year price increases were Toledo, Ohio (10.5%); Jackson, Miss. (10.5%); Nassau County-Suffolk County, N.Y. (9.6%); New Haven-Milford, Conn. (9.0%); Reading, Pa. (8.3%); Springfield, Mo. (8.2%); Akron, Ohio (8.1%); Montgomery, Ala. (7.9%); Cleveland-Elyria, Ohio (7.8%); and Rochester, N.Y. (7.8%).
The most expensive markets were San Jose-Sunnyvale-Santa Clara, Calif. ($2,138,000; 6.5%); Anaheim-Santa Ana-Irvine, Calif. ($1,431,500; -0.4%); San Francisco-Oakland-Hayward, Calif. ($1,426,000; -1.6%); Urban Honolulu, Hawaii ($1,148,600; 4.3%); San Diego-Carlsbad, Calif. ($1,025,000; -2.4%); Salinas-Monterey, Calif. ($978,400; -5.5%); Oxnard-Thousand Oaks-Ventura, Calif. ($958,100; 3.3%); San Luis Obispo-Paso Robles, Calif. ($928,000; 3.7%); Los Angeles-Long Beach-Glendale, Calif. ($879,900; 2.9%); and Boulder, Colo. ($859,500; -3.2%).
Housing affordability showed mixed changes. Twenty-four percent (24%) of markets recorded price declines, up from 17% last quarter. A typical mortgage on an existing single-family home with a 20% down payment cost $2,256 per month, up 6.5% from the first quarter but 0.3% lower than a year ago. Families devoted 25.7% of their income to these payments, compared with 24.4% in the prior quarter and 26.9% last year.
For first-time buyers, the monthly payment on a $365,000 starter home with 10% down reached $2,212, $134 higher than the first quarter and $6 less than last year. These buyers spent 38.7% of their income on housing costs, up from 36.8% in the prior quarter and down from 40.6% a year ago.
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