U.S. Housing Market Update: What’s Happening Across the Country in 2025

Photo by Thomas Wolter on Unsplash

The U.S. housing market in 2025 continues to show sharp regional contrasts in home prices, sales activity, and buyer sentiment. Nationally, existing home sales fell 0.5% in April to a seasonally adjusted annual rate of 4.00 million units, the slowest April since 2009. However, new home sales surged 10.9% during the same period, reaching the highest level since February 2022. This increase was largely driven by builder incentives and price reductions that have appealed to budget-conscious buyers. Meanwhile, the inventory of existing homes rose to 1.45 million units, reflecting a 9% month-over-month and 20.8% year-over-year increase, providing more options for buyers in a market still challenged by high mortgage rates, which average 6.97% nationally as of May 26, 2025 (bankrate.com).

In the Northeast, price appreciation is leading the nation, with a 10.3% year-over-year increase during the first quarter of 2025. This growth is paired with tight inventory and minimal price reductions. Cities like Buffalo, NY, and Trenton, NJ, remain in high demand due to their relative affordability and proximity to larger employment hubs. The New York City housing market remains active, with the median home sold price reaching $870,078 in April 2025, a 3.2% increase year-over-year. Manhattan led with a 12% rise in median sale price to $1.175 million, while resale condos jumped 18% to $1.595 million. Brooklyn and Queens also saw solid growth, with median prices up 8% and 9%, respectively. Sales activity rose sharply, with over 2,500 condo and co-op transactions in Q1. On the rental side, Manhattan saw average monthly rents increase 7% year-over-year to $5,194, and while a wave of new inventory is expected this year, affordability remains a major concern, especially as rent-stabilized units face potential foreclosure and tax lien challenges.

The South, which accounts for 44.9% of all existing-home sales, has a mixed outlook. Home prices in the region increased just 1.3% year-over-year. While some markets, such as parts of Florida and the Carolinas, remain resilient due to job growth and population inflow, other metros are cooling. Austin, Texas, and Atlanta, Georgia, saw notable year-over-year price drops of 5.9% and 1.8%, respectively. Persistent high mortgage rates and buyer hesitation have led to growing inventory and longer time on the market in these cities. However, recent data from May 2025 shows that cities like Nashville, Tennessee, and Raleigh, North Carolina, are bucking the trend with moderate price gains of 3.4% and 2.9%, respectively, driven by strong tech sector expansion and inbound migration. Tampa Bay is also stabilizing with home sales rising 4.5% month-over-month, fueled by new developments targeting first-time buyers. The Southeast’s rental market remains active, with average rents increasing 4.8% year-over-year, notably in Orlando and Charlotte, where rental demand is boosted by a surge in young professionals and remote workers relocating from higher-cost regions.

The Midwest has become one of the strongest-performing regions, driven by affordability and steady labor markets. Milwaukee led the region with a 20% year-over-year increase in home prices. Meanwhile, cities like Detroit and Cleveland continue to be among the most affordable in the nation, with median home prices of $180,000 and $217,750, respectively. These low price points and rising interest in homeownership are driving strong demand and competition, positioning the Midwest as a standout in today’s national housing landscape. In addition, Minneapolis and Columbus have seen increased buyer activity, with home prices rising 6.5% and 5.8% year-over-year, supported by robust job growth in manufacturing and healthcare sectors. Inventory in these markets remains tight, with months of supply hovering around 2.1 to 2.5, leading to faster sales cycles despite mortgage rate pressures. Rental vacancy rates in the Midwest remain low at approximately 5.3%, further underscoring strong housing demand.

Out West, market trends are mixed. Pandemic boomtowns like Salt Lake City are seeing price corrections, with values down 2.1% year-over-year as remote work demand declines. On the other hand, tech-driven markets like Denver and Seattle are rebounding. Denver posted a 5.1% increase in home prices, while Seattle saw a 3.7% uptick. These cities also report fast-moving inventory, with median days on market as low as 10 to 12 days in places like San Jose and Seattle. Meanwhile, California’s Inland Empire is experiencing moderate growth, with home prices rising 2.8%, thanks in part to increased new construction. San Francisco and Los Angeles markets have shown some stabilization with modest price gains of 1.5% and 1.2% year-over-year, respectively, aided by easing inventory shortages and a slight uptick in luxury home demand. Conversely, Portland, Oregon, and Boise, Idaho, are experiencing slowdowns, with prices declining 1.4% and 3.2% year-over-year, reflecting shifting migration patterns and affordability constraints. The Western rental markets remain competitive, with vacancy rates below 4% in most major metros, pushing rents up 6% year-over-year, particularly in urban cores where tech job growth is rebounding.

Overall, the 2025 housing market remains shaped by high mortgage rates, rising inventory, and a strong regional divide. Affordability continues to be a top concern for many buyers, while shifting demand and local economic factors are driving distinctly different outcomes across the country.

Sources:
National Association of Realtors (NAR), Existing Home Sales Data, April 2025
U.S. Census Bureau, New Residential Sales, April 2025
Bankrate.com, 30-Year Mortgage Rates, May 26, 2025: bankrate.com
Zillow Research, Regional Housing Market Reports, Q1 2025
Redfin Data Center, Housing Market Trends by City, May 2025
Apartment List, Rental Market Report, Q1 2025
Local real estate boards and MLS reports for NYC, Southeast, Midwest, and Western metro areas