Home Price Growth Slows

2025-10-28T11:24:29-05:00

Home prices in August grew at the lowest annual rate in over two years, according to the recent release of the S&P Cotality Case-Shiller Home Price Index (seasonally adjusted – SA). Home prices grew at an annual rate of 1.51%, almost half the rate of inflation. This is well below the recent highs of around 6.5% at the beginning of 2024. On a monthly basis, the index posted a modest increase from July, following five consecutive months of decline. In addition to tracking national home price changes, the S&P Cotality CoreLogic Index (SA) also reports home price indexes across 20 major metro areas. Compared to last year, 11 of 20 metro areas reported a home price increase. There were 7 metro areas that grew more than the national rate of 1.51%. The highest annual rate was New York at 6.08%, followed by Chicago at 5.89% and Cleveland at 4.67%. Tampa fell at the fastest rate of -3.34%, followed by the other Florida metro area, Miami, at -1.69%. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Home Price Growth Slows2025-10-28T11:24:29-05:00

Non-Conventional Financing for New Home Sales Loses Ground in 2024

2025-10-20T09:15:39-05:00

Nationwide, the share of non-conventional financing for new home sales accounted for 31% of the market per NAHB analysis of the 2024 Census Bureau Survey of Construction (SOC) data. This is 1.7 percentage point lower than the 2023 share of 32.4%. As in previous years, conventional financing dominated the market at 69.3% of sales, higher than the 2023 share of 67.6%. Non-conventional forms of financing (as opposed to conventional mortgage loans) include loans insured by the Federal Housing Administration (FHA), VA-backed loans, cash purchases and other types of financing such as the Rural Housing Service, Habitat for Humanity, loans from individuals, or state or local government mortgage-backed bonds. The reliance on non-conventional forms of financing varied across the United States, with its share at almost 40% in the East North Central division but only 24% of new single-family home starts in the South Atlantic division. Nationwide, cash purchases were the majority share of non-conventional financing of new home purchases, accounting for 13% of the market share, slightly down from 14% in 2012. However, a NAHB survey based on builders reported that for 2024, all-cash sales were a higher share at 22%. Meanwhile, the Census reported FHA-backed loans accounted for 11% in 2024, whereas in 2023, they had a 12%market share. The share of VA-backed loans was at 4% market share in 2024, while Other Financing was 3% of market share. Regionally, cash financing held the highest share in the East North Central division, where 27% of all homes started were purchased with cash. Cash purchases led non-conventional financing in five out of nine census regions with27% in East North Central, 23% in New England, 21% in East South Central, 16% in Middle Atlantic, and 15% in West North Central. FHA-backed loans accounted for the majority of all non-conventional financing in the West South Central division, accounting for 20% homes started. In New England, very few homes used FHA-backed loans at just _%, along with the East South Central division at just 1% of homes started. VA-backed loans were most used in the West North Central division, accounting for 10% of non-conventional forms of financing. Notably, in New England, only 1% of the homes started used VA-backed loans in 2024. Other financing such as the Rural Housing Service, Habitat for Humanity, loans from individuals, state or local government mortgage-backed bonds were highest in the East South Central division where it was collectively 14% of market share, while the Mountain division reported the lowest share at 1%. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Non-Conventional Financing for New Home Sales Loses Ground in 20242025-10-20T09:15:39-05:00

Existing Home Sales Fall in August Amid Higher Mortgage Rates

2025-09-25T11:21:21-05:00

Existing home sales dipped in August as elevated mortgage rates and higher home prices continued to sideline buyers, according to the National Association of Realtors (NAR). August sales reflected deals closed in June and July, when mortgage rates remained above 6.5%, about 50 basis points higher than current levels.  Mortgage rates have hovered between 6.5% and 7% due to ongoing economic and tariff uncertainty earlier this year. However, rates recently fell below 6.5% for the first time this year as the Fed resumed rate cuts at its September meeting. Last week, the average mortgage rate decreased to 6.26%, the lowest since last Fall. With additional rate cuts expected in coming months, lower mortgage rates and improved inventory should bring more buyers and sellers into the market. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 0.2% to a seasonally adjusted annual rate of 4.00 million in August. However, on a year-over-year basis, sales were 1.8% higher than a year ago. The existing home inventory level was 1.53 million units in August, down 1.3% from July and up 11.7% from a year ago. At the current sales rate, August unsold inventory sits at a 4.6-months’ supply, unchanged from July but up from 4.2-months in August 2024. Inventory between 4.5 to 6 month’s supply is generally considered a balanced market. Homes stayed on the market for a median of 31 days in August, up from 28 days last month and 26 days in August 2024. The first-time buyer share was 28% in August, unchanged from July but up from 26% from a year ago. The August all-cash sales share was 28% of transactions, down from 31% in July but up from 26% a year ago. All-cash buyers are less affected by changes in interest rates. The July median sales price of all existing homes was $422,600, up 2.0% from last year. This marks the 26th consecutive month of year-over-year increases. The median condominium/co-op price in August was up 0.6% from a year ago at $366,800.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025. Existing home sales in August were mixed across the four major regions. Sales rose in the Midwest (2.1%) and West (1.4%) but fell in the South (-1.1%) and Northeast (-4.0%). On a year-over-year basis, sales were up in the South (3.4%) and Midwest (3.2%) but were down in the West (-1.4%) and Northeast (-2.0%). The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 72.0 to 71.7 in July, suggesting elevated mortgage rates continued keeping buyers on the sidelines despite improved inventory. On a year-over-year basis, pending sales were 0.7% higher than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Fall in August Amid Higher Mortgage Rates2025-09-25T11:21:21-05:00

House Price Appreciation by State and Metro Area: Second Quarter 2025

2025-09-03T10:21:20-05:00

House price growth continued to slow in the second quarter of 2025, as the housing market faces mounting pressure from high mortgage rates, elevated inventory, and persistent economic uncertainty. After years of rapid growth, the District of Columbia and 27 metro areas recorded modest house price declines during this quarter, highlighting the regional variations in market performance. Nationally, according to the quarterly all-transactions House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA), U.S. house prices rose 3.8% in the second quarter of 2025, compared to the second quarter of 2024. This marks the slowest year-over-year increase since 2013, indicating the broader market cooldown following a decade of robust gains. The FHFA’s all-transactions HPI tracks average price changes based on repeat sales and refinancings of the same single-family properties. It offers insights not only at the national level but also across states and metropolitan areas. Between the second quarter of 2024 and the second quarter of 2025, all 50 states experienced positive year-over-year (YoY) house price appreciation, ranging from 0.9% to 7.5%. In contrast, the District of Columbia saw a 3.4% decline in house prices. Connecticut and New York led the nation with a 7.5% gain each, followed by Rhode Island with a 6.9% gain. On the opposite end, Colorado recorded the lowest house price appreciation at 0.9%. Out of all 50 states and the District of Columbia, 30 states exceeded the national YoY growth rate of 3.8%. However, on a quarterly basis, home price appreciation decelerated in 44 states and the District of Columbia compared to the first quarter of 2025, highlighting a broad-based deceleration in the housing market. House price growth widely varied across U.S. metro areas year-over-year, ranging from -7.4% to +18.1%. Punta Gorda, FL recorded the largest decline in house prices, whereas Sumter, SC posted the highest increase over the previous four quarters. In the second quarter of 2025, 27 metro areas, in reddish color on the map above, experienced negative house price growth. Meanwhile, 359 metro areas experienced price increases. Since the onset of the COVID-19 pandemic, house prices have surged nationally. Between the first quarter of 2020 and the second quarter of 2025, house prices rose by 54.6% nationwide. More than half of metro areas outpaced this national price growth rate of 54.6%. The table below highlights the top ten and bottom ten markets for house price appreciation during this five-year period. Among all the metro areas, house price appreciation ranged from 11.4% to 87.8%. Morristown, TN led the nation with the highest house price appreciation. Lake Charles, LA recorded the lowest appreciation, marking its fifth consecutive quarter at the bottom. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

House Price Appreciation by State and Metro Area: Second Quarter 20252025-09-03T10:21:20-05:00

Existing Home Sales Rise in July

2025-08-21T11:20:18-05:00

Existing home sales rebounded in July as mortgage rates retreated from the recent peak and home price growth slowed, according to the National Association of Realtors (NAR). This rebound was also supported by inventory improvements, with housing supply at its highest level since May 2020. Despite the ever-so-slight improvement in housing affordability, higher mortgage rates and elevated home prices continue to sideline buyers. Mortgage rates have hovered between 6.5% and 7% due to ongoing economic and tariff uncertainty this year, prompting the Fed to pause interest rate cuts. Though mortgage rates recently peaked at 6.89% in May and have drifted downward in recent weeks, they are expected to stay above 6% for longer due to an anticipated slower easing pace in 2025, these prolonged higher rates and high home prices would continue to weigh on the market. As such, sales are likely to remain limited in the coming months. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, rose 2.0% to a seasonally adjusted annual rate of 4.01 million in July. On a year-over-year basis, sales were 0.8% higher than a year ago. The existing home inventory level was 1.55 million units in July, up 0.6% from June and up 15.7% from a year ago. At the current sales rate, July unsold inventory sits at a 4.6-months’ supply, down from 4.7-months in June but up from 4.0-months in July 2024. Inventory between 4.5 to 6 month’s supply is generally considered a balanced market. Homes stayed on the market for a median of 28 days in July, up from 27 days last month and 24 days in July 2024. The first-time buyer share was 28% in July, down from 30% in June and 29% from a year ago. The July all-cash sales share was 31% of transactions, up from 29% in June and 27% a year ago. All-cash buyers are less affected by changes in interest rates. The June median sales price of all existing homes was $422,400, up 0.2% from last year. This marks the 25th consecutive month of year-over-year increases. The median condominium/co-op price in July was down 1.2% from a year ago at $362,600.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025. Geographically, three of the four regions experienced gains in existing home sales in July, with an increase of 1.4% in the West, 2.2% in the South, and 8.7% in the Northeast. Meanwhile, sales in the Midwest fell 1.1%. On a year-over-year basis, sales were up in the Midwest (1.1%), the Northeast (2.0%) and the South (1.7%) but were down in the West (-4.0%). The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell from 72.6 to 72.0 in June, suggesting elevated mortgage rates continued keeping buyers on the sidelines despite improved inventory. On a year-over-year basis, pending sales were 2.8% lower than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Rise in July2025-08-21T11:20:18-05:00

Market Flip: Existing Homes Outprice New Homes 

2025-07-30T12:23:20-05:00

In the second quarter of 2025, the median price for a new single-family home was $410,800, which was $18,600 lower than the median price of existing homes, which stood at $429,400. This marks the largest historical gap where existing home prices exceeded those of new homes, according to U.S. Census Bureau and National Association of Realtors data (not seasonally adjusted – NSA)  Typically, new homes carry a price premium over existing homes. From 2010 to 2019, this pattern held steady, with an average difference of $66,000. However, over the past five years, the gap has narrowed significantly, averaging just $24,800. Notably, this trend reversed in 2024. In both the second and third quarters, the median price of existing homes surpassed that of new homes.  Both new and existing homes saw dramatic increases in prices post-pandemic due to higher construction costs and limited supply. While overall home prices remain elevated compared to historical norms, new homes prices have moderated due to tactical builder business decisions, whereas existing homes prices continue to increase because of lean supply and perhaps a lack of price discovery for existing homeowners.  Indeed, the median price for a new single-family home sold in the second quarter of 2025 decreased 0.9% from the previous year. New home prices have continued to experience year-over-year declines for nine consecutive quarters.   Meanwhile, the median price for existing single-family homes increased 1.7% from one year ago. Existing home prices have continued to experience year-over-year increases for eight consecutive quarters.  There are several factors as to why new and existing homes are selling at similar price points. Tight inventory continues to push up prices for existing homes, as many homeowners who secured low mortgage rates during the pandemic are hesitant to sell due to current high interest rates.   Meanwhile, new home pricing is more volatile – prices change due to the types and locations of homes being built. Despite various challenges facing the industry, home builders are adapting to affordability challenges by building on smaller lots, constructing smaller homes, and offering incentives. Additionally, there has been a shift in home building toward the South, associated with less expensive homes because of policy effects.   Moreover, the least expensive region for new homes in the first quarter was the South, with a median price of $372,100. The Midwest followed closely behind at $385,300. For existing homes, the Midwest was the most affordably region at $328,800, followed by the South at $376,300.  New homes were most expensive in the Northeast with a median price of $796,700, while the West sold at $531,100. For existing homes, the West led as the most expensive region at $646,100 homes, followed by Northeast at $646,100.   The new home price premium was most pronounced in the Northeast, where new homes sold for $269,500 more than existing homes. The West and South followed the national trend, with existing homes priced $4,200 more than new homes in the West and $115,000 more in the South.  Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Market Flip: Existing Homes Outprice New Homes 2025-07-30T12:23:20-05:00

Existing Home Sales Retreat to 9-Month Low

2025-07-23T11:17:34-05:00

Existing home sales fell to 9-month low in June as home prices hit another monthly record high, according to the National Association of Realtors (NAR). Sluggish pace of sales suggest that higher mortgage rates and elevated home prices are continuing to sideline buyers, despite improved inventory conditions. Mortgage rates have hovered between 6.5% and 7% due to ongoing economic and tariff uncertainty this year, prompting the Fed to pause interest rate cuts. With mortgage rates expected to stay above 6% for longer due to an anticipated slower easing pace in 2025, these prolonged higher rates and high home prices would continue to weigh on the market. As such, sales are likely to remain limited in the coming months. Total existing home sales, including single-family homes, townhomes, condominiums, and co-ops, fell 2.7% to a seasonally adjusted annual rate of 3.93 million in June, the lowest level since October 2024. On a year-over-year basis, sales were unchanged from a year ago. The existing home inventory level was 1.53 million units in June, down 0.6% from May, but up 15.9% from a year ago. At the current sales rate, June unsold inventory sits at a 4.7-months’ supply, up from 4.6-months in May and 4.0-months in June 2024. Inventory between 4.5 to 6 month’s supply is generally considered a balanced market. Homes stayed on the market for a median of 27 days in June, unchanged from May but up from 22 days in June 2024. The first-time buyer share was 30% in June, unchanged from May but up 29% from a year ago. The June all-cash sales share was 29% of transactions, up from 27% in May and 28% a year ago. All-cash buyers are less affected by changes in interest rates. The June median sales price of all existing homes was $453,300, up 2.0% from last year. This marked an all-time high for the month of June and the 24th consecutive month of year-over-year increases. The median condominium/co-op price in June was up 0.8% from a year ago at $374,500.  Recent gains for home inventory will put downward pressure on resale home prices in most markets in 2025. Geographically, three of the four regions experienced a decline in existing home sales in June, with a decrease of 2.2% in the South, 4.0% in the Midwest, and 8.0% in the Northeast. Meanwhile, sales in the West rose 1.4%. On a year-over-year basis, sales were up in the Midwest (2.2%) and the South (1.7%) but were down in the West (-4.1%) and the Northeast (-4.2%). The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose from 71.3 to 72.6 in May, suggesting a solid labor market is supporting the market despite the elevated mortgage rates. On a year-over-year basis, pending sales were 1.1% higher than a year ago, per National Association of Realtors data. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Existing Home Sales Retreat to 9-Month Low2025-07-23T11:17:34-05:00

Sales of Lower-Priced New Single-Family Homes Declined Over the Past Five Years

2025-07-21T09:29:41-05:00

From 2020 to 2024, sales of lower-priced new homes declined significantly as the market moved toward higher-priced segments. Rising construction costs—driven by inflation, supply chain disruptions, and labor shortages—as well as higher regulatory costs, made it increasingly difficult for builders to construct affordable homes. On the other hand, low levels of inventory pushed up the price of new single-family homes, deepening the housing affordability crisis for first-time and middle-income buyers. National New Home Sales by Sales Price Data from the U.S. Census’s Survey of Construction (SOC) shows that total sales of new single-family homes declined by 17% during the 2020—2024 period. Meanwhile, the median sales price of new single-family homes increased significantly, rising from $330,900 in 2020 to $420,300 in 2024. This steep rise in sales price has placed additional pressure on prospective home buyers, particularly those seeking homes in the lower-priced segments. Between 2020 and 2024, the market for new single-family homes experienced significant shifts in the distribution of sales by price range. Most notably, there was a sharp decline in sales of lower-priced homes. Homes priced under $300,000 experienced a 65% decline in sales, while sales of homes priced between $300,000 and $399,999 fell by 10%. In contrast, higher-end segments saw substantial growth, with sales of homes priced between $800,000 and $999,999 more than doubling and those priced at $1,000,000 or more increasing by 85%. The market share of lower-priced homes declined dramatically. In 2020, homes priced under $300,000 accounted for 40% of the total new single-family home sales, making them a dominant category. By 2024, this category had dropped to the third largest, overtaken by homes in the $300,000—$399,999 and $400,000—$499,999 ranges. Meanwhile, the share of higher-priced homes expanded, reflecting a broader shift toward more expensive construction and away from affordability. Regional New Home Sales by Sales Price The regional picture mirrors these national trends, though the magnitude and affected price category vary by geography. Between 2020 and 2024, all four regions—the Northeast, Midwest, South, and West—saw declines in new home sales. The West experienced the steepest drop at 28%, followed by the Midwest at 14%, the South at 13%, and the Northeast at 8%. The declines mainly reflect significant declines in lower-priced home sales. In the Midwest and South, the declines in new home sales were limited to homes priced under $300,000. In the Northeast and West, where the regions tend to have higher median home prices, sales declines occurred in multiple price categories. The Northeast saw a broader decline in new homes sold under $600,000, while new home sales in the West reported declines in three price categories under $500,000. Furthermore, all four regions also experienced a decline in the market share of lower-priced homes. In 2020, more than half of the new homes sold in the Midwest and South were priced under $300,000. By 2024, that share had plummeted to just 16% in the Midwest and 23% in the South. The Northeast and West also saw notable shifts, with the share of homes priced between $300,000 and $499,999 dropping sharply over the same period. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Sales of Lower-Priced New Single-Family Homes Declined Over the Past Five Years2025-07-21T09:29:41-05:00
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