Home Prices Level Off Across U.S. Metros

 Slower price growth marked 2025 as more metros saw declines, equity borrowing increased and affordability pressures remain heading into 2026.

IRVINE, Calif. — Home price growth slowed noticeably in 2025, according to economists at Cotality, a real estate data and property analytics firm that tracks housing trends nationwide. The slowdown gave buyers a bit of breathing room after several fast-paced years. Prices were up 3.4% year over year in January, but by October that increase had cooled to about 1.1%. In fact, price growth hit its lowest point in a decade, and about one-third of the nation’s 100 largest metro areas saw prices dip compared with a year earlier, Cotality, formerly called CoreLogic, said.

That cooling trend came with some ripple effects. Even as home values leveled out, total housing wealth climbed to a record $48.6 trillion, prompting more homeowners to tap into their equity. Home equity lending reached its highest level since 2008. At the same time, mortgage delinquencies edged up slightly, especially among FHA loans.

The market also looked very different depending on location. In the Washington, D.C., area, federal layoffs and a government shutdown pushed inventory up by a record 60%. With more homes available, listings sat longer, and the median time on market rose 36%.

Investors, however, stayed active. They spent an estimated $483 billion on nearly one million single-family homes this year. Meanwhile, the rental market eased nationwide, with single-family rent growth slowing to its weakest pace in 15 years.

Looking ahead to 2026, Cotality expects conditions to improve modestly. Home prices are projected to rise about 3% nationally, though affordability challenges and rising non-mortgage costs could continue to weigh on the market.

U.S. housing market trends

1. Home price growth slowed throughout 2025. January recorded stable 3.4% annual increases, but by October home price growth dropped to just 1.1%, the lowest since 2012. Within the span of three years, the housing market has changed markedly. Compared with the robust gains of 2022, when some metros saw over 30% appreciation, this year was marked by price declines. At the start of the year, only six metros posted year-over-year drops, but by October, that number surged to 32, spreading beyond Florida into Texas, California, and the Mountain West.

2. While national for-sale inventory increased in the single-digits in November 2025, the greater Washington, D.C. region saw record-breaking 60% year-over-year increase in inventory. The number of homes on the market was up at least 40% in all five metropolitan divisions. The sharpest rise was seen in the Frederick-Gaithersburg-Bethesda, MD metro division on the northern edge of the metro area, where the number of unsold homes was up 68% since November 2024.

3. Median time on market for listings in the Washington, D.C. region rose 36% year-over-year, far outpacing the 10% increase for the nation. Both the increase in time on market and the surge in unsold inventory came after large-scale layoffs in the federal government. This skew in the market was amplified by a two-month-long government shutdown in October and November.

4. Investors maintained a strong market presence in 2025. In 2025 (through October), investors spent $483 billion on just under one-third of all single-family home purchases. Investor activity is on track to surpass 2024 totals of $475 billion spent on 1.05 million homes.

5. The typical age for first-time homebuyers remains close to 32 years old. Median age for first-time buyers is up in expensive regions like California, but it’s dropped in less costly Midwestern and Southern cities. This year, the median age for first-time buyers is 36 in both Los Angeles and San Francisco, 35 in New York, 32 in Dallas, 28 in Des Moines-West Des Moines, IA, and 27 in Columbus, IN.

6. Annual single-family rent growth slowed this year, falling to a 15-year low by October. Metros with year-over-year declines in the Single-Family Rent Index grew from eight of the largest 50 metros in January to 18 in October. However, those decreases haven’t erased gains from 2021 and 2022. Despite recording the largest drops in October rent prices, Cape Coral, Florida, and North Port, Florida, are still up 27% and 32%, respectively, over the past five years.

U.S. mortgage market trends

7. Housing wealth peaked in 2025. The total value of the residential housing stock hit a record $48.6 trillion in Q2 2025, before pulling back slightly to $48.4 trillion. Since the start of the decade, the market has created $18 trillion in residential housing wealth, which is $6 trillion more than was added during the entire 2010s.

8. The share of seriously delinquent mortgages (90 days-past-due or more) slightly increased to 0.94% in September 2025 from the same time last year. Serious delinquency rates for Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA), and conventional loans were 4.12%, 2.13%, and 0.63%, respectively. The largest increase in serious delinquency rate was for FHA loans which were up 58 basis points year-over-year. In contrast, the serious delinquency rate for VA loans and conventional loans saw a minor decrease of 5 basis points and 2 basis points, respectively.

9. Home equity lending rose to the highest level since 2008. During the first three quarters of 2025, lenders originated more than 557,000 new home equity loans totaling about $31.6 billion. The number of home equity loans and their amounts have increased by 3% and 10%, respectively, year-over-year in 2025. Home equity loans are gaining popularity as homeowners seek to tap into their accumulated equity.

Looking ahead to 2026

10. Cotality expects the 2026 housing market to begin a modest recovery in 2026. The path to recovery will be supported by labor stability and a gradual easing of inflation and mortgage rates, which are expected to stay above 6%. National home prices should rise by about 3%, with gains centering around northeastern and midwestern markets. However, affordability pressures and financial strain still pose a risk to recovery. Rising non-mortgage costs (insurance, property taxes) could cause "escrow shock" or localized delinquency spikes, especially for low-down-payment borrowers. Persistent inventory shortages and elevated consumer debt will continue to deepen regional disparities and K-shaped recovery dynamics.

Source: Cotality

© 2025 Florida Realtors®

Why a 6% Rate Matters for Homebuyers

 By Melissa Dittmann Tracey

If mortgage rates fall to 6%, sidelined buyers could return. Florida has already seen sales gains when rates dip, Florida Realtors Chief Economist Brad O’Connor said.

WASHINGTON — Mortgage rates have been moderating in recent weeks, and the 30-year fixed-rate mortgage could dip to 6% in the new year, if real estate predictions hold. That would be a notable decrease from the 7% rates seen at the start of 2025 – and it could unleash a group of home buyers who had been sidelined in the market.

According to National Association of Realtors® research, a 1% decrease in rates could add about 5.5 million households, including 1.6 million renters, to the pool of potential buyers.

“Lower rates will bring more buyers back to the market,” says Nadia Evangelou, senior economist and director of real estate research at NAR. She says hopeful first-time buyers may stand to benefit the most, especially those who’ve been squeezed by rising rents. Also, rate declines could spark confidence among current homeowners, who’ve been locked in with lower rates, to sell and relocate – which would further improve housing inventory. “These relatively lower rates will help both first-time buyers and current homeowners take the next step,” Evangelou says.

NAR is forecasting that rates could fall to 6% in 2026. That outlook factors in several influences on rates, including the Federal Reserve’s recent cuts to its short-term interest rates, ongoing inflation trends, the federal deficit and national debt, the impact of tariffs, quantitative tightening and movements in the 10-year Treasury yield.

Mortgage rate sensitivity

The U.S. housing market is slowly transitioning out of one of its most affordability-challenged periods in years, and besides higher home prices, elevated mortgage rates have been blamed for keeping many would-be buyers out of the market. Consider that between mid-2022 and late-2023, surging rates – from 3% averages to above 7% – pushed the typical mortgage payments up by more than $1,000 per month compared to pre-pandemic levels.

“That combined with low housing inventories froze many would-be buyers in place,” Evangelou says. While 6% rates are far from the ultra-low rates during the 2020 and 2021 timeframe, a one percentage point drop in rates compared to earlier in the year would be notable for the housing market. “It would be a huge shift in who can realistically afford to buy,” she says.

For example, on a $500,000 home with a 30-year mortgage at 7% with a 10% down payment, a borrower would pay $3,895 per month. A drop to 6.25% – at which rates have been hovering lately – has caused the monthly payment to fall to $3,672. That is a $223 per month difference, says Matt Schulz, LendingTree’s chief consumer finance analyst.

Already, Brad O’Connor, chief economist at Florida Realtors®, notices a trend – when rates drop, the market moves. Florida home sales have seen about a 10% year-over-year surge this fall, coinciding with a drop in mortgage rates, O’Connor said during NAR’s recent virtual “Real Estate Forecast Summit: The Year Ahead.”That momentum appears to be continuing with pending home sales for single-family homes in Florida up by 23% from a year ago in October – a month where mortgage rates averaged 6.25%. “We’re encouraged by how we see people are responding to lower interest rates already,” he says.

Ryan Price, chief economist at Virginia Realtors®, also said during the NAR webinar that he’s seen a similar trend play out with home sales in his state in unleashing pent-up demand in the housing market. “It’s early glimmers of hope,” he said. “We saw an uptick this fall in sales that coincided with mortgage rate improvements in September. It’s an early sign of potentially what we could see in 2026.”

What could happen in your market?

NAR’s analysis of the data shows that if mortgage rates drop to 6%, that shift could unleash millions of potential buyers who were sidelined previously due to affordability constraints. The metro areas that could stand to benefit the most from a 1% drop in mortgage rates from 7% to 6% are:

Kalamazoo-Portage, Mich.: an 8% increase in households who would qualify to buy

• Yuma, Ariz.: 7.5%
• Racine, Wis.: 7.5%
• Hilton Head Island-Bluffton, S.C.: 7.4%
• Rochester, Minn.: 7.4%
• Olympia-Lacey-Tumwater, Wash.: 7.2%
• Wilmington, N.C.: 7.2%

See NAR’s map to find out how many potential buyers could qualify if rates dropped to 6% in your market.

© 2025 National Association of Realtors® (NAR)