Home prices continued to climb in most U.S. cities during the last quarter, despite slowing growth and emerging weakness in parts of the South and West. Prices rose year over year in 75% of the markets surveyed, while the remaining quarter recorded declines.
Strength was concentrated in the Northeast and the Midwest, while states such as Florida, Texas, Colorado, and California posted price drops due to increased supply and heightened competition among sellers. At the national level, the median home price rose 1.2% to around $415,000, marking a slower pace of growth than in the previous quarter.
Meanwhile, affordability improved as mortgage rates fell to 6.23% and incomes increased, leading to lower monthly payments and a reduced average burden on household income. Financing costs for first-time buyers also declined.
Some smaller cities recorded strong price gains as demand shifted away from major metropolitan areas in search of more affordable options, while other cities experienced noticeable declines.
Despite easing costs, the affordability crisis persists. The average age of a first-time homebuyer rose to 40, and their share of total buyers dropped to a record low.
