A contractor works on a townhouse under construction at the PulteGroup Inc. Metro housing development in Milpitas, California. Photographer: David Paul Morris/Bloomberg
U.S. home-price gains and sales slowed in the third quarter as higher mortgage rates cut into affordability.
The national median price of a previously owned single-family home was $266,900, up 4.8% from a year earlier, the National Association of Realtors said Thursday. In last year's third quarter, prices rose 5.3% on an annual basis.
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While the inventory of home listings is climbing, it's still historically low, and the job market is strong. The combined forces of a tight supply and heightened demand are still driving up prices, albeit at a slower pace. Higher borrowing costs have made some buyers hesitate. While supplies are adequate on the high end, there is an insufficient supply of low- to mid-priced homes, so would-be buyers in those segments are getting pushed out of the market. The West, where affordability problems are most extreme, is seeing the biggest declines in home sales. While transactions nationwide fell 2.4% from a year earlier, they dropped 7.9% in the West.
Single-family home prices increased in the third quarter from a year earlier in 166 of the 178 metropolitan areas measured, the Realtors group said. Eighteen regions had gains of 10% or more, down from 24 in the second quarter.
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