Overview
The 2025 spring homebuyers season ended softly, with slower price growth dominating the narrative and potentially opening the door to more buyers.
- Year-over-year price growth dipped to 1.4% in July 2025. This is almost half the rate of inflation recorded in the Consumer Price Index that month.
- Monthly price increases have been nominal this year and were in negative territory (down 0.2%) between June and July 2025.
- South Dakota saw prices rise 6.2% year-over-year, entering the top 5 states with the highest home price growth. The full list includes New Jersey, South Dakota, Connecticut, Rhode Island, and West Virginia , all of which continue to record more than triple the national rate of price growth.
- Florida, Texas, Montana, and Washington D.C. reported negative home price growth.
National home price growth
July 2025 data
Source: Cotality
Affordability meter
Source: Cotality
Insights from Chief Economist Selma Hepp
Summertime home sales are sluggish. In July, price growth dipped to 1.4%, which is well below the 2.7% rate of inflation recorded in the Consumer Price Index during that same period. However, the national average glosses over pockets of growth around the U.S.
There are some markets, particularly in the Northeast and in the Midwest, where housing fundamentals remain strong and are supporting continued home price increases. States like West Virginia and South Dakota remain attractive thanks to their relative affordability. This is influencing people to move into these states which, in turn, is pushing up prices. West Virginia and South Dakota saw home prices rise 5.7% and 6.2%, respectively.
“July’s decline in home prices is atypical — the last two periods where we saw monthly declines in July was in 2022 and during 2006-2008 period — but this year’s decline follows a year of relatively flat home prices and persistent weakness in homebuying demand,” Cotality’s Chief Economist Dr. Selma Hepp explained. “And even though price weakness has spread across more markets, 50% continue to see prices increase. The markets where prices are increasing tend to be more affordable markets in Midwest, such as the Chicago metro; Indianapolis; Cleveland; Tulsa OK; and Louisville, KY; as well as Philadelphia and the New York metro. At the same time, Florida markets and those in the West continue to see persistent price declines.”
Across the nation, for-sale inventory is growing. While this is providing more options for buyers to choose from, affordability still remains a hurdle for many. Homebuyers need an additional $200,000 compared to 10 years ago to close on a median-priced home, Cotality data found. Still, the number of pending sales is increasing compared to last year, but these deals are more difficult to close, and sometimes even falling through, as buyers and sellers struggle with differing expectations.
Some markets like Los Angeles and Washington D.C. are seeing more homes sell below asking price. These two markets also saw overall home prices decline. Los Angeles recorded a –0.03% drop from June to July 2025 while Washington D.C. saw a –0.2% drop from July 2024 to July 2025. In July, home prices fell in half of the 100 largest metro areas. Typically, prices rise by an average of 0.4% in July based on data from 2015 to 2019.
These recent price dips are incentivizing investors. Investor activity remains elevated this year when compared to previous years, with investors making about one-third of total home purchases across the U.S. The higher share of investor purchases in the market is largely due to a decline in owner-occupied transactions, and these elevated levels are expected to remain steady through the end of 2025.
While price increases have moderated, home costs continue to rise, with this month's median sales price for single-family homes reaching $405,000. Although the national median remains elevated, the pace of home price appreciation is currently trailing inflation. Consequently, housing affordability is gradually improving, providing more prospective buyers an opportunity to enter the property market.
Top 10 hottest markets
Source: Cotality
Top 10 coolest markets
Source: Cotality
Which areas are affordable?
Tracking the top 5 highest and lowest U.S. median sales prices
Source: Cotality
Markets to watch
Tracking markets with a very high risk of price decline in the top 100 CBSAs
Source: Cotality
High-risk market home price trends
Source: Cotality
