Recent declines in mortgage rates and the growing inventory of homes for sale shape the housing outlook for late 2025
Homes.com, a CoStar Group leading online residential marketplace, released a new report today analyzing home price trends in August (based on the data collected to date), including price trends across major metros and house types.
Preliminary price data show U.S. home price growth remained muted in August, with the national median home price rising just 2.4% year-over-year to $389,000. While this marks an increase of $9,000 from last August, prices remain below the June 2025 peak of $395,000. For the first eight months of 2025, home prices have grown only 3.5%, compared to a 7% increase during the same period in 2024.
The housing market continues to show signs of cooling as conditions shift toward a buyer’s market. Homebuying demand has been soft throughout the year, with inventory levels returning to pre-pandemic norms as homes remain on the market longer. Elevated mortgage rates have weighed on affordability, though recent declines—reaching 6.29% last week, the lowest since October 2024, could provide relief. If rates continue to ease and the labor market doesn’t weaken much further, affordability improvements may help stimulate demand in the months ahead.
Regional disparities remain pronounced. The Midwest leads the nation in price appreciation, with some metros posting gains of more than 7% year-over-year. In contrast, oversupplied markets in the South and highly unaffordable areas of California saw price declines. Of the top 40 largest markets, 15 recorded minimal growth of less than 1% or outright declines in August. At the state level, prices fell in Florida and Texas, while 11 states—primarily in the Midwest and Northeast—reported annual price growth exceeding 5%.
The data shared in this report could change slightly once all home sales are accounted for. Erika Ludvigsen, National Director of Residential Analytics at Homes.com, is available for interviews to provide insights on the data and the residential real estate market in general. For more information and insights on the latest home buying and selling market trends, visit Homes.com.
