Rising inventory and cooling price gains are starting to improve conditions for prospective homebuyers, according to Cotality’s August 2025 U.S. Home Price Insights. National year-over-year growth slowed to 1.7% in June 2025 — now below the rate of inflation — while monthly price increases were the weakest for June since 2008. Higher for-sale inventory levels are contributing to the gradual shift, though regional variations remain significant.
National Trends
- Annual growth: U.S. home prices rose 1.7% year over year in June 2025.
- Monthly change: Prices increased 0.1% from May to June, the smallest June gain in 17 years.
- Regional variation: West Virginia posted the largest annual increase at 5.5%, joining Connecticut (7.8%), New Jersey (7.2%), Rhode Island (6.6%), and Illinois in the top five states for price growth.
- Declines: Florida, Texas, Montana, and Washington, D.C., recorded negative annual price growth.
Regional Insights
Cotality Chief Economist Dr. Selma Hepp noted that growth below 2% reflects a market slowdown, with the Sun Belt seeing notable declines and the Midwest and Northeast showing seasonal gains in line with pre-pandemic patterns. The Northeast continues to lead the nation, with New Jersey’s appreciation accelerating in recent months. Hawaii, Kansas, North Dakota, Indiana, and Maine have also seen faster growth compared to earlier this year.
The Midwest remains a strong performer, supported by the highest affordability levels in the country. Markets such as West Virginia benefit from both attractive affordability and steady domestic migration.
Affordability and Costs
Slowing price growth and increased inventories are gradually improving affordability after more than three decades of historic lows. However, other costs continue to affect long-term homeownership. Insurance premiums and property taxes have risen by 70% since 2020, impacting affordability nationwide. Florida is among the states most affected.
Market Softness
In June, 20% of 949 large and small metropolitan areas posted annual price declines — the highest share since 2012. Most of these declines occurred in the South and Southeast, as well as in the San Francisco Bay Area.
Rental Market Contrast
Single-family rents rose 2.9% year over year in June 2025 and have remained between 2.5% and 3% over the past 12 months. Elevated home prices and mortgage rates are keeping many potential buyers in the rental market, sustaining demand for rentals.
Prices and Outlook
The median sales price for a single-family home in June 2025 was $403,000. While prices are still increasing, the pace is slower than inflation, bringing them closer to affordability thresholds.
Cotality reports that high mortgage rates, economic uncertainty, and inventory growth in certain areas — such as the Washington, D.C., metro and Denver — may continue to apply downward pressure on prices, particularly in markets where recent appreciation has significantly limited local affordability.
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