While home price growth is moderating in the South and West, the vast majority of U.S. metropolitan areas continued to post year-over-year gains in the fourth quarter of 2025, preserving record-high equity for millions of homeowners.
According to the latest quarterly report from the National Association of Realtors (NAR), released Wednesday, nearly 75% of tracked metro markets saw prices rise, with the national median single-family home price climbing 1.2% annually to $414,900.
While robust supply triggered price dips in parts of Florida and Texas, the Northeast and Midwest displayed strong resilience, with falling mortgage rates helping improve overall affordability conditions for buyers.
The data reveals a stark divergence in market behavior driven largely by inventory levels. The Northeast and Midwest, often constrained by tighter inventory, remained the engines of appreciation. In the Northeast, median home prices surged 5.5% year over year to $514,600. The Midwest, maintaining its status as the most affordable region, posted a 4.1% annual increase to a median of $317,100.
Conversely, the South and West are seeing significant moderation, aligning NAR’s findings with recent data from Attom showing equity decreases in those regions.
NAR Chief Economist Lawrence Yun noted in the report that price declines were concentrated primarily in Florida and Texas. In these areas, a surge in new home construction has boosted supply, forcing sellers to compete more aggressively for buyers.
Despite these pockets of softness, the broader picture remains one of wealth accumulation. The NAR report indicated that the typical U.S. homeowner has gained approximately $147,000 in housing wealth over the last five years alone.
Even in markets now seeing price corrections, long-term owners retain substantial equity. For example, the typical homeowner in the Miami-Fort Lauderdale area in Florida has accrued around $300,000 in home equity over the past half decade, according to NAR’s Market Statistics dashboard.
For prospective buyers, the fourth quarter offered a reprieve. A combination of falling mortgage rates and income growth outpacing home price appreciation has improved the affordability equation.
The monthly mortgage payment on a typical existing single-family home (assuming a 20% downpayment) fell to $2,057 in fourth quarter of 2025. This represents a 5.7% decrease from the third quarter and a 3.1% drop compared to a year prior.
Furthermore, the typical family now spends 22.9% of their income on mortgage payments, according to NAR, down from 24.7% the previous year and moving further away from the 25% to 30% threshold that economists often cite as placing a burden on household finances.
