What happened to home prices in Q1 2025?
The National Association of Realtors (NAR) released home price data from the first quarter of 2025. The report released Thursday showed prices for single-family homes rose in 189 of 228 metro areas in the first quarter of this year. Also, the national median single-family existing-home price climbed 3.4% from a year ago to $402,300.
Home prices were up in 80% of metro markets, the NAR report said, and the monthly mortgage payment on a typical single-family home with a 20% down payment was up 4.1% from a year ago. The report stated that the average monthly payment for the conditions listed above was $2,120.
“Most metro markets continue to set new record highs for home prices,” NAR chief economist Lawrence Yun said. “In the first quarter, the Northeast performed best in both sales and price gains by percentage. Despite the stronger job additions, the South lagged with declining sales and virtually no price appreciation."
Where did home prices change the most in Q1 2025?
On a region-by-region basis, the U.S. housing market saw the following changes in home prices:
- The South saw the largest share of single-family home sales in 2025 but only saw a 1.3% increase in home prices.
- Prices increased 10.3% in the Northeast.
- Home prices were up 5.2% in the Midwest
- The West saw a 4.1% increase in home prices.
Which metros saw the largest changes in home prices?
Six of the top 10 metro areas with the largest year-over-year increase in median home price increases were in the Midwest and Northeast, the NAR report said. The metro areas with the biggest changes were:
- Syracuse, New York, up 17.9%
- Montgomery, Alabama, up 16.1%
- Youngstown-Warren-Boardman, Ohio-Pennsylvania, up 13.6%
- Nassau County-Suffolk County, New York, up 12.0%
- Toledo, Ohio, up 11.1%
- Cleveland-Elyria, Ohio, up 11.1%
- Rochester, New York, up 11.1%
- Gulfport-Biloxi-Pascagoula, Mississippi, up 10.5%
- Trenton, New Jersey, up 10.4%
- Allentown-Bethlehem-Easton, Pennsylvania-New Jersey, up 10.2%
The report also detailed the most expensive metros in which to purchase a single-family home. Eight of the top 10 most expensive metro areas for Q1 2025 were in California. San Jose-Sunnyvale-Santa Clara California, topped the list with an average home cost of $2,020,000, which is a year-over-year increase of 9.8%.
"Very expensive home prices partly reflect multiple years of home underproduction in those metro markets," Yun added in the quarterly report. "Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution. Affordable markets tend to have more adequate supply and higher homeownership rates."
How about housing affordability in Q1 2025?
The best news for prospective home buyers in the report was that home affordability showed some improvement despite the increase in home prices.
The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,120, down $2 from the fourth quarter of 2024 ($2,122). However, it was up 4.1% from one year ago.
Also, families typically spent 24.4% of their income on mortgage payments, down from 24.8% in the previous quarter and 24.5% one year ago.
First-time homebuyers also caught a bit of a break in Q1 2025. For a typical starter home valued at $342,000 with a 10% down payment loan, the monthly mortgage payment declined to $2,079, down $2 from the previous quarter ($2,081). But that was an increase of $82, or 4.1%, from one year ago ($1,997).
Are you ready to start the homebuying process? Start with a mortgage pre-approval and begin your journey toward your dream home with Guaranteed Rate Affinity! A pre-approval shows buyers and real estate agents that you’re serious and gives you an idea of how much of a mortgage you’re likely to get approved for.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Refinancing your mortgage may increase costs over the term of your loan. Restrictions may apply.
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate, Inc. does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate, Inc. Rate, Inc. its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.