Northeast, Midwest markets lead the way for home-price appreciation

Home-price appreciation continues to reward homeowners and hinder prospective buyers as three-quarters of the nation’s metro areas saw year-over-year price gains in the third quarter.

The National Association of Realtors (NAR) reported Thursday that 77% of the 230 markets it analyzed in Q3 2025 saw annualized home-price increases. That was up from 75% in the second quarter.

Additionally, 4% of these metro areas recorded double-digit gains, although that was down from 5% in the prior quarter.

NAR reported that home-price appreciation was flat between the second and third quarters. On a year-over-year basis, the median price for an existing single-family home reached $426,800, up 1.7%.

These gains varied significantly by location. In the Northeast, the median home price was up 6% year over year to $540,000. In the Midwest, prices rose 4.2% to $331,100.

In the South, the median price of $372,800 was up slightly (0.5%), while the West saw prices backtrack by 0.1% to $633,900.

“Home sales have struggled to gain traction, but prices continue to rise, contributing to record-high housing wealth,” Lawrence Yun, NAR’s chief economist, said in a statement. “Markets in the supply-constrained Northeast and the more affordable Midwest have generally seen stronger price appreciation.

“Price declines are occurring mainly in southern states, where there has been robust new home construction in recent years,” he added. “Given the region’s faster job growth, these price drops should be viewed as temporary and as a second-chance opportunity for those previously priced out of the market.”

Among the 230 metro areas analyzed by NAR, there were 10 that saw home-price appreciation of at least 7.7% over the past year. They were led by Trenton, New Jersey (9.9%); Lansing-East Lansing, Michigan (+9.8%); and Nassau County-Suffolk County, New York (+9.4%).

While Northeast and Midwest markets have seen price rise the most in past year, the nation’s most expensive markets continue to be dominated by large markets on the West Coast.

The San Jose metro area had a median home price of $1.915 million as of Q3 2025, up 0.8% in the past year. Fellow California markets Anaheim ($1.4 million) and San Francisco-Oakland ($1.315 million) followed, with the No. 4 spot going to Honolulu ($1.127 million).

Bridgeport-Stamford-Norwalk, Connecticut, with a median price of $844,900, was the only East Coast market to break into the top 10.

The ongoing cost of homeownership declined on a national basis as the median monthly mortgage payment of $2,187 was down 2.8% from the prior quarter and 2.1% from a year ago. That data assumes the buyer made a 20% down payment.

Additionally, households spent an average of 24.8% of their income on mortgage payments, down from 25.6% in Q2 2025 and 25.2% in Q3 2024.

When isolating first-time homebuyers, the data was more mixed. On a typical starter-home purchase of $362,800 with a 10% down payment, the monthly payment of $2,146 was up $45 on a yearly basis but down $61 on a quarterly basis.

The typical first-time buyer spent 37.4% of their income on mortgage payments in the third quarter, down from 38.6% in Q2 2025 and 38.1% in Q3 2024.