What happened to home prices in Q3 2025?
Home prices were up in 176 out of 230 metro markets during the third quarter of 2025, a report released today by the National Association of REALTORS® (NAR) said. The report also stated that the national median of single-family existing-home prices was $426,800, up 1.7% compared to last year.
While home prices rose in three of the four metro markets the NAR report looks at, they did drop slightly in the South.
“Price declines are occurring mainly in Southern states, where there has been robust new home construction in recent years,” NAR Chief Economist Lawerence Yun said. “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.”
Where did home prices change the most in Q3 2025?
On a region-by-region basis, the U.S. housing market saw the following changes in median home prices:
- Prices increased 6.0% in the Northeast to $540,100.
- Home prices were up 4.2% in the Midwest to $331,100.
- The South saw a 0.5% increase in home prices to $372,800.
- The West saw a slight drop of 0.1% in home prices to $633,900.
For current homeowners, the increase in home prices isn’t necessarily bad news, the NAR suggested.
“Home sales have struggled to gain traction, but prices continue to rise, contributing to record-high housing wealth,” said Yun. “Markets in the supply-constrained Northeast and the more affordable Midwest have generally seen stronger price appreciation.”
Which metros saw the largest changes in home prices?
All 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:
- Trenton, New Jersey, up 9.9%
- Lansing-East Lansing, Michigan, up 9.8%
- Nassau County-Suffolk County, New York, up 9.4%
- New Haven-Milford, Connecticut, up 9.0%
- New York-Jersey City-White Plains, New York-New Jersey, up 8.1%
- Manchester-Nashua, New Hampshire, up 8.0%
- St. Louis, Missouri-Illinois, up 7.9%
- Bridgeport-Stamford-Norwalk, Connecticut, up 7.8%
- Toledo, Ohio, up 7.7%
- Cleveland-Elyria, Ohio, up 7.7%
The NAR report also detailed the 10 most expensive metro markets for single-family homes. Of the 10 most expensive metro markets, eight of them for the third quarter of 2025 were in California. Topping the list was San Jose-Sunnyvale-Santa Clara, California, with an average home price of $1,915,000, which is a year-over-year increase of 0.8%.
How about housing affordability in Q3 2025?
While median existing single-family home prices have increased from the same time last year, they were down slightly from the record highs of the second quarter of 2025.
The monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,187. This was down 2.8% from the previous quarter but up 2.1% from the same time last year.
Families typically spend 37.4% of their income on mortgage payments, down 1.2% from 2025’s previous quarter and down 0.7% from a year ago.
First-time homebuyers did see a drop in starter homes compared to the second quarter of 2025 but an increase compared to the same time last year. The monthly mortgage for a typical starter home valued at $362,800 with a 10% down payment in the second quarter of 2025 was $2,146. This monthly mortgage was down $61 from last quarter but up $45 from a year ago.
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