National home prices sustained modest annual growth in the third quarter of 2025 while eking out marginal quarterly gains, according to newly released government data.
The Federal Housing Finance Agency (FHFA), which regulates government-sponsored mortgage investors Fannie Mae and Freddie Mac, reports home prices rose just 0.2% from the second quarter to the third quarter and 2.2% year over year.
National home prices were flat from June to July before rising 0.4% from July to August — the largest monthly gains in 2025. Monthly price gains were flat again from August to September, FHFA data shows, with annual appreciation in September up 1.7%.
Forty-four states and Washington, D.C., observed positive annual house price growth in the third quarter, with the top five being Illinois (6.9%), New York (6.8%), North Dakota (6.3%), New Jersey (5.9%) and Connecticut (5.8%).
Florida saw the most significant annual price declines, with an average loss of 2.3%.
Among the nine census divisions tracked by the FHFA, only the Pacific division — including Washington, Oregon and California — experienced negative annual home price growth, slipping 0.1%.
The Middle Atlantic division, comprising New York, New Jersey and Pennsylvania, recorded the strongest annual appreciation, up 5.7% from the third quarter of 2024.
Overall mortgage origination volumes fell in the third quarter, according to real estate analytics company Attom, underscoring affordability pressures limiting homebuyer demand.
The pace of home sales has slowed with prospective buyers finding more inventory options and room for negotiations as sellers remain active in the market.
Attom reports third-quarter purchase originations fell 4.8% from the second quarter and 6.6% from the third quarter of 2024, despite comparable mortgage rates to last autumn.
Even as price softening continues, limited demand has emerged to meet the rising tide of sellers, with rent growth and home prices still at much higher levels than they were just five years ago in markets across the U.S.
By a narrow margin, Fannie Mae’s most recent economic and housing outlook, published last week, suggests that existing-home sales for 2025 may fall short of 2024’s three-decade low.
House prices rose in 76 of the 100 largest metro areas the FHFA tracks. The largest annual price increase was observed in the metro area spanning Allentown, Pa., and Easton, N.J., notching 9.7% price appreciation over the year.
