The second quarter of 2025 offered a familiar yet nuanced snapshot of the U.S. housing market. Across 170 of 228 metropolitan areas, roughly 75 percent, home prices rose from April through June. That remains a strong majority, though it marks a slight decline from 83 percent in the first quarter. Even more telling, only 5 percent of metros saw double digit price gains, down from 11 percent just months earlier. These shifts reflect a market that continues to grow, but with a steadier, more sustainable pace.
Nationally, the median price for existing single family homes reached a record $429,400, up 1.7 percent year over year. It is a milestone figure, though notably more restrained than the 3.4 percent gain posted in the first quarter. The message is clear: the market remains dynamic, yet more balanced, giving buyers and sellers alike room for thoughtful decision-making.
Regional trends show distinct contrasts. The Northeast led with a 6.1 percent gain, fueled by limited supply and strong demand. The Midwest followed at 3.5 percent, drawing interest from buyers seeking greater value for their investment. The South held steady compared to last year, with areas such as Florida and Texas experiencing a mild cooling as new construction brings more options to the market. The West posted a 0.6 percent gain, signaling that many high cost metros may be leveling off.
Even with these moderations, certain markets surged ahead. Toledo, Ohio, and Jackson, Mississippi each recorded annual gains of 10.5 percent, followed closely by Nassau County, New York, and New Haven, Connecticut. These areas illustrate how affordability, local economic strength, and lifestyle appeal can combine to drive significant appreciation. On the other end of the spectrum, approximately one quarter of metros experienced modest declines, most often in expensive coastal hubs such as San Francisco, San Diego, and Boulder. These adjustments are better viewed as healthy recalibration after years of sharp increases rather than signs of instability.
Affordability remains a pressing challenge. Typical housing costs consumed 33.7 percent of average household income in the second quarter, up from 32 percent earlier this year and well above traditional lending benchmarks. In some states, the gap between income growth and housing costs has widened considerably, with first time buyers shouldering a particularly heavy burden.
There are signs of potential relief ahead. Mortgage rate forecasts suggest a gradual easing through the remainder of the year, with the possibility of rates dipping closer to 6 percent in 2026. Annual home price growth is also expected to moderate, offering buyers and sellers a clearer path to making confident moves.
The takeaway is one of balance. Price growth remains present in most areas, yet the pace allows for more measured transactions. For those active in the market, success now depends on staying informed, understanding local dynamics, and making decisions that reflect today’s conditions rather than yesterday’s momentum.
• National Association of REALTORS® – Metro Price Gains and Regional Data, Q2 2025
• National Association of REALTORS® – Home Prices Hold at Record Highs, Latest Quarterly Data
• ATTOM – Q2 2025 Home Affordability Report
• California Association of REALTORS® – Q2 2025 Housing Affordability Index
• Fannie Mae – July 2025 Economic and Housing Forecast
