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Home prices across the U.S. continued to climb in the first quarter of the year, but fewer metro areas saw steep increases, a sign that the market is cooling.
Eighty-three percent of U.S. metro areas experienced year-over-year price increases for single-family existing homes, down from 89 percent in the final quarter of 2024, according to the National Association of Realtors’ quarterly housing affordability report released Thursday.
The national median price rose 3.4 percent year over year to $402,300, while they rose 4.8 percent in the previous quarter. Thirty-year fixed mortgage rates ranged between 6.63 percent to 7.04 percent in Q1.
Only 11 percent of metro areas posted double-digit price gains, down 14 percent from the previous quarter.
Lawrence Yun | NAR Chief Economist
“Most metro markets continue to set new record highs for home prices,” NAR Chief Economist Lawrence Yun said in the report. “In the first quarter, the Northeast performed best in both sales and price gains by percentage. Despite the stronger job additions, the South lagged with declining sales and virtually no price appreciation.”
The South still led in overall sales volume, representing 44.9 percent of all existing-home transactions in the first quarter. However, home prices in the region increased just 1.3 percent year over year. By contrast, prices rose 10.3 percent in the Northeast, 5.2 percent in the Midwest and 4.1 percent in the West.
Some of the largest price jumps were seen in New York and Ohio. Metro areas, including Syracuse, New York (17.9 percent); Montgomery, Alabama (16.1 percent); Youngstown-Warren-Boardman, Ohio-Pennsylvania (13.6 percent); and Nassau County-Suffolk County, New York (12.0 percent) all saw double-digit increases.
The nations priciest markets remained concentrated in California, including San Jose-Sunnyvale-Santa Clara ($2,020,000; 9.8 percent); Anaheim-Santa Ana-Irvine ($1,450,000; 6.2%); and San Francisco-Oakland-Hayward ($1,320,000; 1.5 percent).
Yun attributed these high prices to years of home underproduction and low homeownership rates.
“Very expensive home prices partly reflect multiple years of home underproduction in those metro markets,” Yun added. “Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution. Affordable markets tend to have more adequate supply and higher homeownership rates.”
Still, not all markets are on the rise. Nearly 17 percent of metro areas saw home prices decline in Q1, up from 11 percent in Q4 2024.
“A few areas where home prices declined a year or two ago are now rebounding, including Boise, Las Vegas, Salt Lake City, San Francisco and Seattle,” Yun said. “Similarly, some markets currently experiencing price declines – but with solid job growth – could see prices recover in the near future, such as Austin, San Antonio, Huntsville, Myrtle Beach, Raleigh and many Florida markets.”
Affordability saw a slight improvement. Monthly mortgage payments for a typical home with a 20 percent down payment dipped to $2,120, just $2 less than the previous quarter. Still, that’s $84 more than what buyers paid a year ago. Homeowners were spending about 24.4 percent of their income on mortgage payments, slightly down from 24.8 percent in the previous quarter.
First-time buyers also saw minor relief. The monthly mortgage payment on a typical starter home valued at $342,000 came in at $2,079, down just $2 from Q4. However, those buyers were still spending a significant portion of their income — 36.8 percent on mortgage payments.
To afford a mortgage with a 10 percent down payment, households needed to earn an income of at least $100,000 in 45.1 percent of all U.S. markets. Only 3.1 percent of markets required less than $50,000 in income to afford the same down payment, highlighting just how tight affordability remains.
