Home Prices Rise in Most Metros Despite Spreading Weakness in South and West

Home prices continued to rise last quarter in most metros tracked by a key index, despite slowing national growth and spreading weakness in many parts of the South and West.

Median sales prices for existing single-family homes rose on an annual basis in 168 out of 230 markets tracked (75%) in the fourth quarter, while falling in the remaining 25%, according to the National Association of Realtors® quarterly price report released Wednesday.

Although home prices remained strong in most of the Northeast and Midwest, 60 metros reported annual price declines, up from the 51 markets with falling prices seen in the prior quarter.

“While most metro markets continue to see record-high housing wealth, some areas are experiencing home price declines,” says NAR Chief Economist Lawrence Yun. “These declining markets are concentrated primarily in Florida and Texas, where robust supply and recent home construction are increasing competition among sellers to attract buyers.”

In addition to Florida and Texas, Colorado markets showed notable price declines in the latest data, and weakness continued to spread in California, where an inventory buildup has weighed on prices.

The national median sales price of existing homes grew 1.2% year over year to $414,900 in the fourth quarter of 2025, down from 1.7% annual growth in the third quarter.

“Home sales squeaked out a gain in the final quarter of 2025, helped by improving affordability conditions,” says Yun. “Mortgage rates fell, income growth outpaced home price growth, and the income required to buy a typical home declined.”

Mortgage rates averaged 6.23% in the final quarter of 2025, the lowest quarterly average in three years, according to Freddie Mac.

In contrast to the third quarter, the metros with the biggest annual price declines were no longer heavily concentrated in Florida and Texas.

Elmira, NY, saw the biggest price decline at -7.2%, followed by Farmington, NM ,(-7%), and Boulder, CO,(-6.7%).

Meanwhile, Cape Girardeau, MO, saw the biggest annual price appreciation in the fourth quarter at +19.9%, followed by Cumberland, MD,(+17.1), Owensboro, KY , (+15%), and Anniston, AL, (+14.9+).

Rapid appreciation in these smaller, more affordable metros was likely driven by spillover growth from larger nearby cities, as buyers sought out deals in lower-priced outlying areas.

Typical monthly payments for homebuyers

Nationally, the typical monthly mortgage payment for an existing single-family home fell to $2,057 in the fourth quarter (assuming a 20% down payment), according to the latest NAR report. This represents a significant 5.7% decrease from the previous quarter and a 3.1% drop compared to a year ago.

The burden on household budgets is also easing, with the average family now spending 22.9% of their income on mortgage payments. This is a notable improvement from the 24.5% seen last quarter and the 24.7% share recorded this time last year.

For first-time buyers, the outlook has also brightened. For a typical starter home valued at $352,700 with a 10% down payment, the monthly mortgage payment dropped to $2,019.

This reflects a $122 monthly decrease from the previous quarter and a $62 decrease from a year earlier.

First-time buyers are now allocating 34.6% of their income toward mortgage payments, down from 37.0% last quarter and 37.3% a year ago.

Despite these cooling costs, affordability challenges remain. A recent NAR report found that the typical first-time homebuyer is now 40 years old, a record high, while first-time buyers accounted for just 21% of all home purchases this year, the lowest share on record.