Most U.S. metro areas recorded higher home prices in the third quarter of 2025, even though sales activity remained soft. According to new quarterly data from the National Association of Realtors (NAR), 176 of 230 metro areas about 77% posted year-over-year price increases. That’s a small improvement from the previous quarter, showing that home values continue to rise even in a slower market.
Nationwide, the median price for an existing single-family home reached $426,800, up 1.7% from a year earlier. This matches the annual growth seen in the second quarter, but fewer markets saw big jumps. Only 4% of metros recorded double-digit increases, down slightly from 5% last quarter.
Regional differences remained clear.
- Northeast: Prices rose 6% to a median of $540,100, supported by very low supply.
- Midwest: Up 4.2% to $331,100, helped by affordability and steady demand.
- South: Up only 0.5% to $372,800, reflecting more new construction and better inventory levels.
- West: Slipped 0.1% to $633,900, suggesting a mild price reset after years of sharp increases.
NAR Chief Economist Lawrence Yun said weak sales haven’t stopped home values from rising because supply remains too limited. He pointed out that tighter inventory in the Northeast and more budget-friendly homes in the Midwest supported those regions’ stronger gains. In contrast, the slight pullback in parts of the South may open a short window of opportunity for buyers who were priced out earlier.
Top Metro Areas With the Fastest Price Growth
Several large metro areas posted strong yearly price increases:
- Trenton, NJ – +9.9%
- Lansing–East Lansing, MI – +9.8%
- Nassau County–Suffolk County, NY – +9.4%
- New Haven–Milford, CT – +9.0%
- New York–Jersey City–White Plains, NY–NJ – +8.1%
- Manchester–Nashua, NH – +8.0%
- St. Louis, MO–IL – +7.9%
- Bridgeport–Stamford–Norwalk, CT – +7.8%
- Toledo, OH – +7.7%
- Cleveland–Elyria, OH – +7.7%
These markets reflect a mix of affordability, strong local demand, and limited available homes.
Most Expensive Housing Markets in Q3
High-cost coastal metros continued to dominate the list of priciest places to buy a home:
- San Jose, CA – $1,915,000 (+0.8%)
- Anaheim, CA – $1,400,000 (+0.1%)
- San Francisco, CA – $1,315,000 (+0.5%)
- Urban Honolulu, HI – $1,127,900 (-0.9%)
- Salinas, CA – $1,019,900 (+6.3%)
- San Diego, CA – $1,009,500 (0.0%)
- Los Angeles, CA – $954,100 (+0.7%)
- Oxnard–Thousand Oaks–Ventura, CA – $935,700 (-1.2%)
- San Luis Obispo–Paso Robles, CA – $931,800 (-1.9%)
- Bridgeport–Stamford–Norwalk, CT – $844,900 (+7.8%)
San Jose kept its status as the most expensive housing market, still well above the $1.9 million mark.
Affordability Improved Slightly, But Challenges Remain
Even with modest relief, owning a home is still a stretch for many families:
- The monthly payment on a typical home (20% down) dropped to $2,187, a 2.8% decrease from Q2.
- But that payment is still 2.1% higher than a year earlier.
- Families now spend 24.8% of their income on mortgage payments down from 25.6% last quarter but still elevated.
For first-time buyers, the gap is wider:
- A typical starter home priced at $362,800 now requires a $2,146 monthly payment with 10% down.
- That eats up 37.4% of income, a slight improvement but still a significant burden.
Experts say affordability will only improve meaningfully if incomes rise, mortgage rates continue easing, or more supply hits the market.
A Market Defined by Slow Sales but Steady Price Growth
The Q3 data shows a market that is cooling in terms of activity but still leaning toward sellers in many areas. Prices are still rising for most metros, driven by tight supply and long-term demand from younger buyers forming households.
While the pace of growth is not fast, values remain firm a sign that inventory, not demand, remains the main pressure point in today’s market. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.
