Home Prices Level Off Across Metros Nationally

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®