Home Prices Hit New Highs in 83% of U.S. Metro Areas—Is Your City on the List?

The American dream of homeownership feels increasingly like a competitive sport as prices continue their upward climb across most of the country. According to fresh data from the National Association of Realtors for Q1 2025, the national median home price has reached a significant milestone at $402,300, representing a 3.4% increase from last year. While prices are still rising in 83% of metro markets, this represents a slight cooling from the previous quarter's 89%, suggesting the market might be easing off the accelerator—though certainly not slamming on the brakes.

What makes this housing landscape fascinating is the distinct regional story unfolding across what the report calls "a tale of four Americas." The Northeast leads with a striking 10.3% price growth, while the South shows a modest 1.3% increase despite accounting for nearly half of all existing home sales. This regional disparity stems partly from increased construction activity in southern states, creating more inventory that helps stabilize prices. Meanwhile, California continues its dominance of the high-end market, claiming eight of the ten most expensive housing markets in the country, with Silicon Valley's Sunnyvale-Santa Clara leading at an astounding $2.02 million median price.

The affordability crisis remains the central challenge, particularly for first-time buyers. With mortgage rates hovering between 6.6% and 7%, the typical monthly payment for a median-priced home consumes about 24.4% of household income. The situation is considerably more dire for new market entrants, who now spend nearly 37% of their income on mortgage payments alone. Perhaps most telling is that in 45% of metro markets, households need a six-figure income to comfortably afford a starter home with a 10% down payment. Despite these challenges, the market shows signs of rebalancing in previously overheated areas, offering glimmers of hope that vary significantly by location. Understanding your specific local market conditions—job growth, construction projects, and migration patterns—will ultimately prove more valuable than any national trend as you navigate the complex landscape of housing affordability in 2025 and beyond.

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Chapters

• 0:00 Housing Market Overview Q1 2025
• 3:45 Regional Price Trends Across America
• 8:05 California's Dominance in Expensive Markets
• 10:10 Price Declines: Rebalancing Not Crashing
• 12:06 The Affordability Crisis for Homebuyers
• 16:48 Key Takeaways and Local Considerations

Transcript

Speaker 1: 0:25

OK. Does it ever feel like trying to find a home you can actually afford is, like I don't know, some kind of intense competitive sport these days?

Speaker 2: 0:34

Huh yeah, you're definitely not alone in feeling that.

Speaker 1: 0:36

Well, you're probably not imagining it, we're going to dive deep into the very latest US home price trends today.

Speaker 2: 0:43

Exactly. We've got the the brand new data fresh off the press for Q1 2025. This comes from the National Association of Realtors.

Speaker 1: 0:52

Nair right.

Speaker 2: 0:53

And our mission today really is to unpack this. We want to go beyond just the. You know the raw numbers.

Speaker 1: 0:59

Yeah, get into what's really happening.

Speaker 2: 1:01

Right. Pinpoint the shifts. Understand the very different stories playing out across the country, region by region.

Speaker 1: 1:07

And what it all means for affordability, which is the big question for so many folks.

Speaker 2: 1:11

Precisely. What does this actually mean for your ability to afford a home?

Speaker 1: 1:15

Right. So forget trying to wade through those. You know dense reports yourself. We're here to pull out the most important stuff, the key insights, maybe even some surprising facts.

Speaker 2: 1:25

Yeah, hopefully give you a really clear picture of what the housing market looks like right now.

Speaker 1: 1:29

Okay, let's do it. So kick us off. What's the big headline from this latest NAR report?

Speaker 2: 1:35

Well, the main takeaway, the big picture, is that home prices they're still going up in most parts of the US. They'll go up, Okay. Specifically, 83% of the metro markets that NAR tracks saw home prices increase in the first quarter of 2025.

Speaker 1: 1:49

83%. That's a lot of cities. How many is that?

Speaker 2: 1:53

That works out to 189 out of the 228 cities they look at.

Speaker 1: 1:57

Wow, okay, so widespread increases are definitely still the norm, but I think I caught something there. 83%, wasn't it higher last?

Speaker 2: 2:05

quarter Good catch. Yes, that's a really important nuance actually. In the last quarter of 2024, that figure was 89%, so we've seen a slight dip.

Speaker 1: 2:15

So what does that dip tell us? Less intense increases.

Speaker 2: 2:18

Exactly. It suggests that well, the overall upward trend is still there. Prices are still rising broadly, but the intensity might be starting to moderate just a bit. Fewer markets seeing those really rapid jumps.

Speaker 1: 2:29

Okay, that makes sense. And what about the national median price itself? Where does that stand now?

Speaker 2: 2:33

The national median price for a single-family existing home is now $402,300.

Speaker 1: 2:39

Oof Over $400,000 for the median. That's a milestone.

Speaker 2: 2:43

It is. It's a significant number.

Speaker 1: 2:45

And how does that stack up against, say, this time last year?

Speaker 2: 2:48

So that $402,300 figure. It represents a 3.4% increase year over year.

Speaker 1: 2:54

Okay, 3.4%.

Speaker 2: 2:56

And here's where it gets even more interesting.

Speaker 1: 2:58

Yeah.

Speaker 2: 2:58

Linking back to that intensity point Right, this rate of increase, the 3.4%. It's actually slower than what we saw in the fourth quarter of 2024. Back then the year-over-year increase was 4.8%.

Speaker 1: 3:11

Ah okay, so price is still going up compared to last year, but the speed at which they're rising has slowed down a bit compared to the end of last year.

Speaker 2: 3:18

Precisely, the data really points towards a gradual cooling, not slamming on the brakes, but maybe easing off the accelerator. A touch on that national level.

Speaker 1: 3:27

Okay, easing off the accelerator, like that. So upward pressure is still there, broadly speaking, but maybe not quite as forceful.

Speaker 2: 3:33

That's a good way to put it.

Speaker 1: 3:34

But I think I saw in the report that some places are still seeing really big jumps right, Despite this national cooling trend.

Speaker 2: 3:41

Oh, absolutely, you really have to zoom in. While the national picture gives us that broad view, the local level can be well, completely different. Right, we actually saw 26 metro areas, 26, that recorded double-digit price growth over the year.

Speaker 1: 3:56

Double digits Okay, so things are still very hot in some pockets.

Speaker 2: 3:59

Very hot. These are the markets where, yeah, things are still heating up quite significantly.

Speaker 1: 4:03

Can you give us an example or two? Where are we seeing that kind of growth?

Speaker 2: 4:09

Sure Syracuse, New York, for example, it saw a pretty remarkable 17.9% increase in home prices.

Speaker 1: 4:14

Wow, nearly 18%.

Speaker 2: 4:16

Yeah, and Montgomery Alabama also stood out with a 16.1% rise Very significant.

Speaker 1: 4:22

Syracuse and Montgomery Interesting. So what's the deal with places like these? What's driving such big price surges there, kind of against the national grain.

Speaker 2: 4:30

Well, often what we see is these are maybe smaller metro areas or regions that, historically speaking, might have been considered undervalued compared to the big coastal cities, for instance, so they're benefiting from a mix of things. Usually, greater affordability is a big one, drawing people in.

Speaker 1: 4:46

Right People seeking value.

Speaker 2: 4:48

Yeah, and then you often have local job markets growing, which increases demand, and sometimes it's also about migration people moving from more expensive states looking for, you know, more bang for their buck.

Speaker 1: 4:58

Well, it makes a lot of sense. People chasing affordability finding jobs. It increases competition, drives up prices.

Speaker 2: 5:05

OK, it's that classic supply and demand playing out very locally.

Speaker 1: 5:09

Now you mentioned regional differences. The report used this phrase a tale of four Americas, I think. Tell us about that.

Speaker 2: 5:16

Exactly, yeah, if we kind of connect these local hotspots to the broader geographic patterns, you really do see these distinct trends across the four major US regions.

Speaker 1: 5:26

OK, so let's break that down. Where should we start? Let's start with the South.

Speaker 2: 5:28

It's huge right. Okay, so let's break that down. Where should we start? Let's start with the. South. It's huge right. It accounts for the largest share of existing home sales almost 45% of the total market.

Speaker 1: 5:35

Nearly half the market. Wow. So with that much activity, prices must be booming there too.

Speaker 2: 5:40

Well, interestingly, no, not quite. Despite a lot of areas in the South having really strong job creation, which you'd think would push prices up, the region overall saw pretty modest price growth, just 1.3 percent year over year for the region as a whole.

Speaker 1: 5:55

Only 1.3 percent. Why so low, especially with job growth?

Speaker 2: 5:59

A key factor seems to be new home construction. Yeah, there's been a significant increase in building activity across much of the South.

Speaker 1: 6:06

Ah, so more supply coming online.

Speaker 2: 6:09

Exactly. More inventory means more choices for buyers. It helps to absorb some of that demand and stabilize prices. Less frantic bidding, perhaps.

Speaker 1: 6:17

Right, more supply eases that competitive pressure cooker Okay, interesting. What about the Northeast? My gut feeling is that it's generally pricier up there.

Speaker 2: 6:26

Your gut feeling is correct. It is generally a higher cost region and the data really backs that out. The Northeast actually saw the highest price growth of any region in Q1.

Speaker 1: 6:35

Highest, how high?

Speaker 2: 6:36

10.3%.

Speaker 1: 6:37

Wow over 10%. So much for cooling.

Speaker 2: 6:39

Yeah, it really highlights how tight supply can drive prices up, even in markets that are already expensive. If there just aren't enough homes for the people who want them, prices can still surge Big time. 10% in the Northeast that's yeah, that's a big jump. Okay, what about the other two regions, midwest and West? So the Midwest saw a respectable price rise 5.2%, pretty solid. And the West it, recorded a more moderate gain, 4.1% 4.1% in the West.

Speaker 1: 7:08

Yeah.

Speaker 2: 7:09

And for the West. You know it's worth thinking about this in context. Some markets out West saw pretty significant slowdowns earlier in this whole housing cycle, so this 4.1% might actually be seen as a bit of a recovery or stabilization in those areas.

Speaker 1: 7:22

Okay, so a real patchwork quilt across the country, then not one single story.

Speaker 2: 7:27

Definitely not Very diverse.

Speaker 1: 7:28

Okay, let's shift gears a bit. Let's talk about the really high-end markets. California always seems to dominate that conversation, right?

Speaker 2: 7:34

It certainly does, and this report no exception. It continues a very well-established trend. California is home to get this eight of the 10 most expensive housing markets in the entire country.

Speaker 1: 7:44

Eight out of 10. Still, wow, who's at the top?

Speaker 2: 7:48

Leading the pack. Sunnyvale, santa Clara, the heart of Silicon Valley.

Speaker 1: 7:52

Okay, brace myself. What's the median price? An astounding $2.02 million $2 million for a median single family home.

Speaker 2: 8:02

Yep, and that's up nearly 10%, 9.8% to be exact, just over the last year.

Speaker 1: 8:06

Incredible, just incredible. Which other California spots are in that top tier.

Speaker 2: 8:11

Well, right behind San Jose is Anaheim, Santa Anna, Irvine, down in Orange County Median there is $1.45 million.

Speaker 1: 8:18

Still way up there.

Speaker 2: 8:19

Oh yeah, up 6.2% year over year. Then you got San Francisco Oakland Hayward at $1.32 million, although interestingly its increase was more modest, just 1.5 percent. San Diego-Carlsbad also broke that million-dollar mark 1.04 million-dollar median and that was up 5.7 percent.

Speaker 1: 8:37

Okay, and the report mentioned others too, right, salinas-oxnard?

Speaker 2: 8:40

That's right. Salinas-oxnard, san Luis Obispo and the Los Angeles metro area are also in that top 10 list of most expensive markets, all in California.

Speaker 1: 8:48

So California really is just its own world when it comes to these high home values. Pretty, much. Were there any super expensive markets outside of California that caught your eye in the report?

Speaker 2: 8:58

Yes, a couple definitely stood out Urban Honolulu in Hawaii. Medium price there $1.165 million.

Speaker 1: 9:06

Okay, another million plus market.

Speaker 2: 9:08

And Naples, Florida, down on the Gulf Coast, comes in at $865,000 for the median.

Speaker 1: 9:14

Naples, right. So what do places like Honolulu and Naples have in common with those California hotspots?

Speaker 2: 9:20

Well, often it's a similar story right Very high demand desirability, but also significant limits on new supply. Geographical constraints like being on an island, or coastal regulations can really restrict how much new housing can be built.

Speaker 1: 9:34

Right Limited land high demand. Okay, now let's flip the coin. The report also said nearly 17% of metro areas actually saw prices go down in the first quarter.

Speaker 2: 9:43

That's correct, almost 17%.

Speaker 1: 9:45

Is that a worry? Should we see that as a red flag for the market?

Speaker 2: 9:49

It's a fair question Seeing more markets with price declines up from about 11 percent. The previous quarter might sound a bit concerning at first glance, but the context NAR provides is really key here. The report suggests this is much more likely a sign of market rebalancing rather than, you know, the start of some kind of widespread crash.

Speaker 1: 10:09

Rebalancing, not crashing, Rather than you know, the start of some kind of widespread crash Rebalancing, not crashing.

Speaker 2: 10:11

Okay yeah, think about it. Many of these areas saw absolutely explosive price growth during the pandemic years, just unsustainable rates. So what we're likely seeing is a natural correction, or maybe the market just kind of catching its breath as demand cools off a bit from those frantic levels.

Speaker 1: 10:26

Okay, so more like a leveling off in places that maybe got way too hot too fast, rather than a signal of some major downturn ahead.

Speaker 2: 10:33

That seems to be the interpretation. Yes, right, a normalization perhaps.

Speaker 1: 10:37

Did the report give any examples of markets like that, Places where prices may be dipped but might be starting to bounce back now?

Speaker 2: 10:43

Yes, actually Several markets fit that description, places like Boise, idaho, las Vegas, nevada, salt Lake City, utah.

Speaker 1: 10:52

Okay, markets that were definitely hot previously.

Speaker 2: 10:54

Exactly, and even some of those really expensive California markets we mentioned. Like San Francisco and also Seattle Washington, these places had seen some price decreases, but the latest data shows indicators that they might be starting to rebound somewhat.

Speaker 1: 11:08

Interesting. So even where prices cooled, the underlying demand might still be strong enough to bring them back up again. It suggests that, yes, that the floor might be higher than some feared in those markets. Ok, good to know. Now all this talk about prices going up, sometimes down, sometimes cooling. It all comes back to one critical thing for most people affordability.

Speaker 2: 11:28

The million dollar question or maybe the million dollar question, or maybe the $2 million question in San Jose.

Speaker 1: 11:33

Huh, right. So what did the latest data tell us about how attainable homeownership actually is right now?

Speaker 2: 11:41

Well, no surprise here Affordability is still a major, major hurdle for a lot of folks.

Speaker 1: 11:45

Yeah.

Speaker 2: 11:45

You've got mortgage rates. The 30-year fixed rate has been kind of bouncing around between, say, 6.6% and just over 7%.

Speaker 1: 11:53

It's significantly higher than a few years ago.

Speaker 2: 11:55

Oh, absolutely. And that cost of borrowing money. It has a huge direct impact on your monthly payment and just how much house you can realistically afford.

Speaker 1: 12:04

So how does that translate into actual dollars? What's the typical monthly mortgage payment looking like now?

Speaker 2: 12:10

OK, so for a typical existing single family home, assuming a buyer puts down 20 percent, which is a big assumption, we'll get to that.

Speaker 1: 12:18

Right.

Speaker 2: 12:18

The average monthly principal and interest payment is hovering around two thousand one hundred and twenty dollars.

Speaker 1: 12:23

Twenty one, twenty a month, and how does that compare to last year?

Speaker 2: 12:26

That's up four point one percent compared to the first quarter of twenty twenty four. So still rising year over year. That's up 4.1 percent compared to the first quarter of 2024. So still rising year over year. Ok, though interestingly it's actually down just a tiny bit like two dollars from the previous quarter, q4 2024.

Speaker 1: 12:39

Two dollars. Well, I guess every little bit counts. Maybe Doesn't sound like much relief, though.

Speaker 2: 12:44

No, it's hardly noticeable relief, practically speaking.

Speaker 1: 12:47

And what does that two thousand one hundred twenty dollar payment mean in terms of people's budgets? What slice of their income is going to the mortgage?

Speaker 2: 12:54

Right now. The report estimates that households are spending about 24.4% of their income on that mortgage payment.

Speaker 1: 13:00

Okay, almost a quarter of their income.

Speaker 2: 13:02

Yeah, which is actually a slight improvement from the 24.8% it was in the fourth quarter, so again a tiny bit of easing, but still historically high.

Speaker 1: 13:12

But you mentioned the 20% down payment. That picture probably looks quite different for first-time buyers, right? They often have less to put down.

Speaker 2: 13:19

Exactly. The situation is considerably tougher for people trying to get into the market for the first time. They're often dealing with smaller down payments, maybe facing student debt, and they're more sensitive to those interest rate moves.

Speaker 1: 13:31

So what does affordability look like specifically for them? What's a starter home costing?

Speaker 2: 13:36

Okay, so the average price for what NAR considers a starter home is around $342,000 nationally 342,.

Speaker 1: 13:45

Still a big number.

Speaker 2: 13:46

It is, and if you assume a more typical 10% down payment for a first-time buyer, that estimated monthly mortgage payment jumps to about $2,079.

Speaker 1: 13:55

Wow, almost the same payment as the overall median home, but with half the down payment on a cheaper house. That's rough.

Speaker 2: 14:02

It really shows the impact of that down payment and potentially mortgage insurance and that $2,079 payment also up 4.1% year over year.

Speaker 1: 14:12

Okay, and the income slice. What percentage of their income does that eat up?

Speaker 2: 14:16

Here's the really stark figure that payment consumes nearly 37% of a typical first-time buyer household's income 37% just for the mortgage payment.

Speaker 1: 14:27

Principal and interest Just principal and interest Doesn't include taxes, insurance, maintenance. Wow, nearly 40% of your income just gone on the mortgage payment. Principal and interest, just principal and interest.

Speaker 2: 14:31

Doesn't include taxes, insurance, maintenance Wow, nearly 40% of your income just gone on the mortgage payment. That sounds incredibly tight. That doesn't leave much room for anything else.

Speaker 1: 14:39

It's incredibly tight. It makes getting that foot on the property ladder really really difficult for a lot of young people and families. And here's another statistic that really drives it home To comfortably afford that mortgage with a 10% down payment, you'd need a household income of at least $100,000.

Speaker 2: 14:55

A hundred grand income.

Speaker 1: 14:56

In 45% of the metro market's NAR tracks. Almost half the country requires a six-figure income just to get in with 10% down.

Speaker 2: 15:04

And is that number going up?

Speaker 1: 15:11

Yes, the number of markets requiring that $100K plus income is increasing, man OK. So buying a home, especially if you're just starting out, it really requires a pretty hefty income in a huge part of the country now.

Speaker 2: 15:20

It does. The bar is significantly higher than it used to be.

Speaker 1: 15:23

So let's try to wrap this all together. We've covered a lot of ground. What real wealth? And in an economy that can feel a bit volatile sometimes?

Speaker 2: 15:53

having that equity in your home provides a pretty significant degree of financial stability for many families.

Speaker 1: 15:58

That's definitely encouraging if you're already in the market, but what about the other side, the folks trying to get in?

Speaker 2: 16:02

Yeah, For prospective buyers. Let's be honest, the path is still really challenging. There's no sugarcoating that. However, there are maybe some glimmers of hope, depending on where you are the signs of cooling prices in some areas, that slight stabilization in mortgage payments we saw, even if tiny.

Speaker 1: 16:20

Yeah.

Speaker 2: 16:20

And the potential for more inventory coming online, especially with new construction in regions like the South, it could start to create some opportunities.

Speaker 1: 16:28

So not easy, but maybe slightly less impossible than it felt six months ago in some places.

Speaker 2: 16:33

Perhaps, yeah. But it really, really underscores how vital it is to look beyond the national headlines. You have to focus intensely on your specific local market conditions.

Speaker 1: 16:45

Because what's happening nationally might be totally different from your city or even your neighborhood.

Speaker 2: 16:49

Absolutely. The national average is just that, an average. Your local reality could be vastly different.

Speaker 1: 16:54

Okay, that's a crucial point. So just to quickly recap our deep dive then home prices still mostly going up across the US, but definitely slower than before.

Speaker 2: 17:03

Yep, the pace has eased.

Speaker 1: 17:04

Big differences between regions, that tale of four Americas Northeast hot, south cooling thanks to building Midwest and west somewhere in between. Affordability Still a huge issue, a major concern, especially for first-time buyers needing that six-figure income in so many places.

Speaker 2: 17:22

The biggest hurdle, for sure.

Speaker 1: 17:23

But there are some early signs maybe of stabilization or even prices softening in certain markets that got overheated.

Speaker 2: 17:29

Right, some rebalancing occurred.

Speaker 1: 17:31

Okay, that covers a lot.

Speaker 2: 17:32

It's a complex picture, constantly evolving, and you know this really leads to a final thought. Maybe a question for you, our listener, to chew on. Okay, given everything we've talked about these national trends, the cooling pace, the regional variations, but also knowing how intensely local real estate is, what specific factors do you think will actually have the biggest impact on housing affordability right where you live, in your specific area, over the next year or so?

Speaker 1: 18:03

Good question.

Speaker 2: 18:03

Yeah, really think about it. Is it local job growth or maybe job losses? Are there big new construction projects planned or underway? Are people moving into your town or are they leaving? Because ultimately, it's probably those very local dynamics, more than anything else, that will shape your housing reality going forward.