May 14, 2025 • 18 mins
The American dream of homeownership feels increasingly like a competitive sport as prices continue their upward climb across most of the country. According to fresh data from the National Association of Realtors for Q1 2025, the national median home price has reached a significant milestone at $402,300, representing a 3.4% increase from last year. While prices are still rising in 83% of metro markets, this represents a slight cooling from the previous quarter's 89%, suggesting the market might be easing off the accelerator—though certainly not slamming on the brakes.
What makes this housing landscape fascinating is the distinct regional story unfolding across what the report calls "a tale of four Americas." The Northeast leads with a striking 10.3% price growth, while the South shows a modest 1.3% increase despite accounting for nearly half of all existing home sales. This regional disparity stems partly from increased construction activity in southern states, creating more inventory that helps stabilize prices. Meanwhile, California continues its dominance of the high-end market, claiming eight of the ten most expensive housing markets in the country, with Silicon Valley's Sunnyvale-Santa Clara leading at an astounding $2.02 million median price.
The affordability crisis remains the central challenge, particularly for first-time buyers. With mortgage rates hovering between 6.6% and 7%, the typical monthly payment for a median-priced home consumes about 24.4% of household income. The situation is considerably more dire for new market entrants, who now spend nearly 37% of their income on mortgage payments alone. Perhaps most telling is that in 45% of metro markets, households need a six-figure income to comfortably afford a starter home with a 10% down payment. Despite these challenges, the market shows signs of rebalancing in previously overheated areas, offering glimmers of hope that vary significantly by location. Understanding your specific local market conditions—job growth, construction projects, and migration patterns—will ultimately prove more valuable than any national trend as you navigate the complex landscape of housing affordability in 2025 and beyond.
🔗 Check out our website for more information and valuable resources: https://linkin.bio/davidinvest
📸 Follow us on Instagram for updates and behind-the-scenes content: https://www.instagram.com/davidinvestai/
🔗 Network with me on LinkedIn for professional connections and advice: https://www.linkedin.com/in/vdavidenko/
📧 Subscribe to our newsletter for exclusive investment tips and insights: https://sunrisecapitalgroup.com/subscribe/
📚 Check out my course on Udemy - https://www.udemy.com/course/passive-real-estate-investing/
Disclaimer: The content provided on this channel is intended for educational and informational purposes only and does not constitute investment, financial, or tax advice. We strongly recommend that you consult with qualified professionals before making any financial decisions. Past performance of investments is not indicative of future results. The information presented here is not a solicitation or offer to buy or sell any securities or investments. Our firm may have conflicts of interest, and we do not guarantee the accuracy or timeliness of the content provided. Investing involves risks, and you should carefully consid...
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
OK.
Does it ever feel like tryingto find a home you can actually
afford is, like I don't know,some kind of intense competitive
sport these days?
Speaker 2 (00:08):
Huh yeah, you're definitely not alone in feeling
that.
Speaker 1 (00:11):
Well, you're probably not imagining it, we're going
to dive deep into the verylatest US home price trends
today.
Speaker 2 (00:17):
Exactly.
We've got the the brand newdata fresh off the press for Q1
2025.
This comes from the NationalAssociation of Realtors.
Speaker 1 (00:26):
Nair right.
Speaker 2 (00:28):
And our mission today really is to unpack this.
We want to go beyond just the.
You know the raw numbers.
Speaker 1 (00:33):
Yeah, get into what's really happening.
Speaker 2 (00:35):
Right.
Pinpoint the shifts.
Understand the very differentstories playing out across the
country, region by region.
Speaker 1 (00:42):
And what it all means for affordability, which is the
big question for so many folks.
Speaker 2 (00:45):
Precisely.
What does this actually meanfor your ability to afford a
home?
Speaker 1 (00:49):
Right.
So forget trying to wadethrough those.
You know dense reports yourself.
We're here to pull out the mostimportant stuff, the key
insights, maybe even somesurprising facts.
Speaker 2 (01:00):
Yeah, hopefully give you a really clear picture of
what the housing market lookslike right now.
Speaker 1 (01:03):
Okay, let's do it.
So kick us off.
What's the big headline fromthis latest NAR report?
Speaker 2 (01:09):
Well, the main takeaway, the big picture, is
that home prices they're stillgoing up in most parts of the US
.
They'll go up, Okay.
Specifically, 83% of the metromarkets that NAR tracks saw home
prices increase in the firstquarter of 2025.
Speaker 1 (01:23):
83%.
That's a lot of cities.
How many is that?
Speaker 2 (01:28):
That works out to 189 out of the 228 cities they look
at.
Speaker 1 (01:31):
Wow, okay, so widespread increases are
definitely still the norm, but Ithink I caught something there.
83%, wasn't it higher last?
Speaker 2 (01:39):
quarter Good catch.
Yes, that's a really importantnuance actually.
In the last quarter of 2024,that figure was 89%, so we've
seen a slight dip.
Speaker 1 (01:49):
So what does that dip tell us?
Less intense increases.
Speaker 2 (01:52):
Exactly.
It suggests that well, theoverall upward trend is still
there.
Prices are still rising broadly, but the intensity might be
starting to moderate just a bit.
Fewer markets seeing thosereally rapid jumps.
Speaker 1 (02:03):
Okay, that makes sense.
And what about the nationalmedian price itself?
Where does that stand now?
Speaker 2 (02:07):
The national median price for a single-family
existing home is now $402,300.
Speaker 1 (02:13):
Oof Over $400,000 for the median.
That's a milestone.
Speaker 2 (02:17):
It is.
It's a significant number.
Speaker 1 (02:19):
And how does that stack up against, say, this time
last year?
Speaker 2 (02:22):
So that $402,300 figure.
It represents a 3.4% increaseyear over year.
Speaker 1 (02:28):
Okay, 3.4%.
Speaker 2 (02:30):
And here's where it gets even more interesting.
Speaker 1 (02:32):
Yeah.
Speaker 2 (02:33):
Linking back to that intensity point Right, this rate
of increase, the 3.4%.
It's actually slower than whatwe saw in the fourth quarter of
2024.
Back then the year-over-yearincrease was 4.8%.
Speaker 1 (02:45):
Ah okay, so price is still going up compared to last
year, but the speed at whichthey're rising has slowed down a
bit compared to the end of lastyear.
Speaker 2 (02:52):
Precisely, the data really points towards a gradual
cooling, not slamming on thebrakes, but maybe easing off the
accelerator.
A touch on that national level.
Speaker 1 (03:01):
Okay, easing off the accelerator, like that.
So upward pressure is stillthere, broadly speaking, but
maybe not quite as forceful.
Speaker 2 (03:07):
That's a good way to put it.
Speaker 1 (03:08):
But I think I saw in the report that some places are
still seeing really big jumpsright, Despite this national
cooling trend.
Speaker 2 (03:15):
Oh, absolutely, you really have to zoom in.
While the national picturegives us that broad view, the
local level can be well,completely different.
Right, we actually saw 26 metroareas, 26, that recorded
double-digit price growth overthe year.
Speaker 1 (03:30):
Double digits Okay, so things are still very hot in
some pockets.
Speaker 2 (03:33):
Very hot.
These are the markets where,yeah, things are still heating
up quite significantly.
Speaker 1 (03:37):
Can you give us an example or two?
Where are we seeing that kindof growth?
Speaker 2 (03:43):
Sure Syracuse, New York, for example, it saw a
pretty remarkable 17.9% increasein home prices.
Speaker 1 (03:48):
Wow, nearly 18%.
Speaker 2 (03:50):
Yeah, and Montgomery Alabama also stood out with a
16.1% rise Very significant.
Speaker 1 (03:57):
Syracuse and Montgomery Interesting.
So what's the deal with placeslike these?
What's driving such big pricesurges there, kind of against
the national grain.
Speaker 2 (04:04):
Well, often what we see is these are maybe smaller
metro areas or regions that,historically speaking, might
have been considered undervaluedcompared to the big coastal
cities, for instance, so they'rebenefiting from a mix of things
.
Usually, greater affordabilityis a big one, drawing people in.
Speaker 1 (04:20):
Right People seeking value.
Speaker 2 (04:22):
Yeah, and then you often have local job markets
growing, which increases demand,and sometimes it's also about
migration people moving frommore expensive states looking
for, you know, more bang fortheir buck.
Speaker 1 (04:33):
Well, it makes a lot of sense.
People chasing affordabilityfinding jobs.
It increases competition,drives up prices.
Speaker 2 (04:39):
OK, it's that classic supply and demand playing out
very locally.
Speaker 1 (04:43):
Now you mentioned regional differences.
The report used this phrase atale of four Americas, I think.
Tell us about that.
Speaker 2 (04:51):
Exactly, yeah, if we kind of connect these local
hotspots to the broadergeographic patterns, you really
do see these distinct trendsacross the four major US regions
.
Speaker 1 (05:00):
OK, so let's break that down.
Where should we start?
Let's start with the South.
Speaker 2 (05:02):
It's huge right.
Okay, so let's break that down.
Where should we start?
Let's start with the.
South.
It's huge right.
It accounts for the largestshare of existing home sales
almost 45% of the total market.
Speaker 1 (05:09):
Nearly half the market.
Wow.
So with that much activity,prices must be booming there too
.
Speaker 2 (05:14):
Well, interestingly, no, not quite.
Despite a lot of areas in theSouth having really strong job
creation, which you'd thinkwould push prices up, the region
overall saw pretty modest pricegrowth, just 1.3 percent year
over year for the region as awhole.
Speaker 1 (05:29):
Only 1.3 percent.
Why so low, especially with jobgrowth?
Speaker 2 (05:33):
A key factor seems to be new home construction.
Yeah, there's been asignificant increase in building
activity across much of theSouth.
Speaker 1 (05:40):
Ah, so more supply coming online.
Speaker 2 (05:43):
Exactly.
More inventory means morechoices for buyers.
It helps to absorb some of thatdemand and stabilize prices.
Less frantic bidding, perhaps.
Speaker 1 (05:51):
Right, more supply eases that competitive pressure
cooker Okay, interesting.
What about the Northeast?
My gut feeling is that it'sgenerally pricier up there.
Speaker 2 (06:00):
Your gut feeling is correct.
It is generally a higher costregion and the data really backs
that out.
The Northeast actually saw thehighest price growth of any
region in Q1.
Speaker 1 (06:09):
Highest, how high?
Speaker 2 (06:10):
10.3%.
Speaker 1 (06:11):
Wow over 10%.
So much for cooling.
Speaker 2 (06:13):
Yeah, it really highlights how tight supply can
drive prices up, even in marketsthat are already expensive.
If there just aren't enoughhomes for the people who want
them, prices can still surge Bigtime.
10% in the Northeast that'syeah, that's a big jump.
Okay, what about the other tworegions, midwest and West?
So the Midwest saw arespectable price rise 5.2%,
(06:36):
pretty solid.
And the West it, recorded amore moderate gain, 4.1% 4.1% in
the West.
Speaker 1 (06:43):
Yeah.
Speaker 2 (06:43):
And for the West.
You know it's worth thinkingabout this in context.
Some markets out West sawpretty significant slowdowns
earlier in this whole housingcycle, so this 4.1% might
actually be seen as a bit of arecovery or stabilization in
those areas.
Speaker 1 (06:56):
Okay, so a real patchwork quilt across the
country, then not one singlestory.
Speaker 2 (07:01):
Definitely not Very diverse.
Speaker 1 (07:02):
Okay, let's shift gears a bit.
Let's talk about the reallyhigh-end markets.
California always seems todominate that conversation,
right?
Speaker 2 (07:08):
It certainly does, and this report no exception.
It continues a verywell-established trend.
California is home to get thiseight of the 10 most expensive
housing markets in the entirecountry.
Speaker 1 (07:18):
Eight out of 10.
Still, wow, who's at the top?
Speaker 2 (07:22):
Leading the pack.
Sunnyvale, santa Clara, theheart of Silicon Valley.
Speaker 1 (07:26):
Okay, brace myself.
What's the median price?
An astounding $2.02 million $2million for a median single
family home.
Speaker 2 (07:36):
Yep, and that's up nearly 10%, 9.8% to be exact,
just over the last year.
Speaker 1 (07:41):
Incredible, just incredible.
Which other California spotsare in that top tier.
Speaker 2 (07:45):
Well, right behind San Jose is Anaheim, Santa Anna,
Irvine, down in Orange CountyMedian there is $1.45 million.
Speaker 1 (07:52):
Still way up there.
Speaker 2 (07:53):
Oh yeah, up 6.2% year over year.
Then you got San FranciscoOakland Hayward at $1.32 million
, although interestingly itsincrease was more modest, just
1.5 percent.
San Diego-Carlsbad also brokethat million-dollar mark 1.04
million-dollar median and thatwas up 5.7 percent.
Speaker 1 (08:11):
Okay, and the report mentioned others too, right,
salinas-oxnard?
Speaker 2 (08:14):
That's right.
Salinas-oxnard, san Luis Obispoand the Los Angeles metro area
are also in that top 10 list ofmost expensive markets, all in
California.
Speaker 1 (08:22):
So California really is just its own world when it
comes to these high home values.
Pretty, much.
Were there any super expensivemarkets outside of California
that caught your eye in thereport?
Speaker 2 (08:33):
Yes, a couple definitely stood out Urban
Honolulu in Hawaii.
Medium price there $1.165million.
Speaker 1 (08:40):
Okay, another million plus market.
Speaker 2 (08:42):
And Naples, Florida, down on the Gulf Coast, comes in
at $865,000 for the median.
Speaker 1 (08:48):
Naples, right.
So what do places like Honoluluand Naples have in common with
those California hotspots?
Speaker 2 (08:54):
Well, often it's a similar story right Very high
demand desirability, but alsosignificant limits on new supply
.
Geographical constraints likebeing on an island, or coastal
regulations can really restricthow much new housing can be
built.
Speaker 1 (09:08):
Right Limited land high demand.
Okay, now let's flip the coin.
The report also said nearly 17%of metro areas actually saw
prices go down in the firstquarter.
Speaker 2 (09:17):
That's correct, almost 17%.
Speaker 1 (09:19):
Is that a worry?
Should we see that as a redflag for the market?
Speaker 2 (09:23):
It's a fair question Seeing more markets with price
declines up from about 11percent.
The previous quarter mightsound a bit concerning at first
glance, but the context NARprovides is really key here.
The report suggests this ismuch more likely a sign of
market rebalancing rather than,you know, the start of some kind
of widespread crash.
Speaker 1 (09:43):
Rebalancing, not crashing, Rather than you know,
the start of some kind ofwidespread crash Rebalancing,
not crashing.
Speaker 2 (09:45):
Okay yeah, think about it.
Many of these areas sawabsolutely explosive price
growth during the pandemic years, just unsustainable rates.
So what we're likely seeing isa natural correction, or maybe
the market just kind of catchingits breath as demand cools off
a bit from those frantic levels.
Speaker 1 (10:00):
Okay, so more like a leveling off in places that
maybe got way too hot too fast,rather than a signal of some
major downturn ahead.
Speaker 2 (10:07):
That seems to be the interpretation.
Yes, right, a normalizationperhaps.
Speaker 1 (10:11):
Did the report give any examples of markets like
that, Places where prices may bedipped but might be starting to
bounce back now?
Speaker 2 (10:17):
Yes, actually Several markets fit that description,
places like Boise, idaho, lasVegas, nevada, salt Lake City,
utah.
Speaker 1 (10:26):
Okay, markets that were definitely hot previously.
Speaker 2 (10:28):
Exactly, and even some of those really expensive
California markets we mentioned.
Like San Francisco and alsoSeattle Washington, these places
had seen some price decreases,but the latest data shows
indicators that they might bestarting to rebound somewhat.
Speaker 1 (10:42):
Interesting.
So even where prices cooled,the underlying demand might
still be strong enough to bringthem back up again.
It suggests that, yes, that thefloor might be higher than some
feared in those markets.
Ok, good to know.
Now all this talk about pricesgoing up, sometimes down,
sometimes cooling.
It all comes back to onecritical thing for most people
(11:02):
affordability.
Speaker 2 (11:03):
The million dollar question or maybe the million
dollar question, or maybe the $2million question in San Jose.
Speaker 1 (11:07):
Huh, right.
So what did the latest datatell us about how attainable
homeownership actually is rightnow?
Speaker 2 (11:15):
Well, no surprise here Affordability is still a
major, major hurdle for a lot offolks.
Speaker 1 (11:19):
Yeah.
Speaker 2 (11:19):
You've got mortgage rates.
The 30-year fixed rate has beenkind of bouncing around between
, say, 6.6% and just over 7%.
Speaker 1 (11:27):
It's significantly higher than a few years ago.
Speaker 2 (11:29):
Oh, absolutely.
And that cost of borrowingmoney.
It has a huge direct impact onyour monthly payment and just
how much house you canrealistically afford.
Speaker 1 (11:38):
So how does that translate into actual dollars?
What's the typical monthlymortgage payment looking like
now?
Speaker 2 (11:45):
OK, so for a typical existing single family home,
assuming a buyer puts down 20percent, which is a big
assumption, we'll get to that.
Speaker 1 (11:52):
Right.
Speaker 2 (11:52):
The average monthly principal and interest payment
is hovering around two thousandone hundred and twenty dollars.
Speaker 1 (11:57):
Twenty one, twenty a month, and how does that compare
to last year?
Speaker 2 (12:00):
That's up four point one percent compared to the
first quarter of twenty twentyfour.
So still rising year over year.
That's up 4.1 percent comparedto the first quarter of 2024.
So still rising year over year.
Ok, though interestingly it'sactually down just a tiny bit
like two dollars from theprevious quarter, q4 2024.
Speaker 1 (12:14):
Two dollars.
Well, I guess every little bitcounts.
Maybe Doesn't sound like muchrelief, though.
Speaker 2 (12:18):
No, it's hardly noticeable relief, practically
speaking.
Speaker 1 (12:21):
And what does that two thousand one hundred twenty
dollar payment mean in terms ofpeople's budgets?
What slice of their income isgoing to the mortgage?
Speaker 2 (12:28):
Right now.
The report estimates thathouseholds are spending about
24.4% of their income on thatmortgage payment.
Speaker 1 (12:35):
Okay, almost a quarter of their income.
Speaker 2 (12:36):
Yeah, which is actually a slight improvement
from the 24.8% it was in thefourth quarter, so again a tiny
bit of easing, but stillhistorically high.
Speaker 1 (12:46):
But you mentioned the 20% down payment.
That picture probably looksquite different for first-time
buyers, right?
They often have less to putdown.
Speaker 2 (12:53):
Exactly.
The situation is considerablytougher for people trying to get
into the market for the firsttime.
They're often dealing withsmaller down payments, maybe
facing student debt, and they'remore sensitive to those
interest rate moves.
Speaker 1 (13:05):
So what does affordability look like
specifically for them?
What's a starter home costing?
Speaker 2 (13:10):
Okay, so the average price for what NAR considers a
starter home is around $342,000nationally 342,.
Speaker 1 (13:19):
Still a big number.
Speaker 2 (13:20):
It is, and if you assume a more typical 10% down
payment for a first-time buyer,that estimated monthly mortgage
payment jumps to about $2,079.
Speaker 1 (13:29):
Wow, almost the same payment as the overall median
home, but with half the downpayment on a cheaper house.
That's rough.
Speaker 2 (13:36):
It really shows the impact of that down payment and
potentially mortgage insuranceand that $2,079 payment also up
4.1% year over year.
Speaker 1 (13:46):
Okay, and the income slice.
What percentage of their incomedoes that eat up?
Speaker 2 (13:51):
Here's the really stark figure that payment
consumes nearly 37% of a typicalfirst-time buyer household's
income 37% just for the mortgagepayment.
Speaker 1 (14:01):
Principal and interest Just principal and
interest Doesn't include taxes,insurance, maintenance.
Wow, nearly 40% of your incomejust gone on the mortgage
payment.
Principal and interest, justprincipal and interest.
Speaker 2 (14:05):
Doesn't include taxes , insurance, maintenance Wow,
nearly 40% of your income justgone on the mortgage payment.
That sounds incredibly tight.
That doesn't leave much roomfor anything else.
Speaker 1 (14:13):
It's incredibly tight .
It makes getting that foot onthe property ladder really
really difficult for a lot ofyoung people and families.
And here's another statisticthat really drives it home To
comfortably afford that mortgagewith a 10% down payment, you'd
need a household income of atleast $100,000.
Speaker 2 (14:29):
A hundred grand income.
Speaker 1 (14:30):
In 45% of the metro market's NAR tracks.
Almost half the countryrequires a six-figure income
just to get in with 10% down.
Speaker 2 (14:38):
And is that number going up?
Speaker 1 (14:45):
Yes, the number of markets requiring that $100K
plus income is increasing, manOK.
So buying a home, especially ifyou're just starting out, it
really requires a pretty heftyincome in a huge part of the
country now.
Speaker 2 (14:54):
It does.
The bar is significantly higherthan it used to be.
Speaker 1 (14:57):
So let's try to wrap this all together.
We've covered a lot of ground.
What real wealth?
And in an economy that can feela bit volatile sometimes?
Speaker 2 (15:27):
having that equity in your home provides a pretty
significant degree of financialstability for many families.
Speaker 1 (15:32):
That's definitely encouraging if you're already in
the market, but what about theother side, the folks trying to
get in?
Speaker 2 (15:36):
Yeah, For prospective buyers.
Let's be honest, the path isstill really challenging.
There's no sugarcoating that.
However, there are maybe someglimmers of hope, depending on
where you are the signs ofcooling prices in some areas,
that slight stabilization inmortgage payments we saw, even
if tiny.
Speaker 1 (15:54):
Yeah.
Speaker 2 (15:54):
And the potential for more inventory coming online,
especially with new constructionin regions like the South, it
could start to create someopportunities.
Speaker 1 (16:02):
So not easy, but maybe slightly less impossible
than it felt six months ago insome places.
Speaker 2 (16:07):
Perhaps, yeah.
But it really, reallyunderscores how vital it is to
look beyond the nationalheadlines.
You have to focus intensely onyour specific local market
conditions.
Speaker 1 (16:19):
Because what's happening nationally might be
totally different from your cityor even your neighborhood.
Speaker 2 (16:24):
Absolutely.
The national average is justthat, an average.
Your local reality could bevastly different.
Speaker 1 (16:28):
Okay, that's a crucial point.
So just to quickly recap ourdeep dive then home prices still
mostly going up across the US,but definitely slower than
before.
Speaker 2 (16:37):
Yep, the pace has eased.
Speaker 1 (16:38):
Big differences between regions, that tale of
four Americas Northeast hot,south cooling thanks to building
Midwest and west somewhere inbetween.
Affordability Still a hugeissue, a major concern,
especially for first-time buyersneeding that six-figure income
in so many places.
Speaker 2 (16:56):
The biggest hurdle, for sure.
Speaker 1 (16:57):
But there are some early signs maybe of
stabilization or even pricessoftening in certain markets
that got overheated.
Speaker 2 (17:03):
Right, some rebalancing occurred.
Speaker 1 (17:05):
Okay, that covers a lot.
Speaker 2 (17:06):
It's a complex picture, constantly evolving,
and you know this really leadsto a final thought.
Maybe a question for you, ourlistener, to chew on.
Okay, given everything we'vetalked about these national
trends, the cooling pace, theregional variations, but also
knowing how intensely local realestate is, what specific
(17:27):
factors do you think willactually have the biggest impact
on housing affordability rightwhere you live, in your specific
area, over the next year or so?
Speaker 1 (17:37):
Good question.
Speaker 2 (17:37):
Yeah, really think about it.
Is it local job growth or maybejob losses?
Are there big new constructionprojects planned or underway?
Are people moving into yourtown or are they leaving?
Because ultimately, it'sprobably those very local
dynamics, more than anythingelse, that will shape your
housing reality going forward.
OK.
Does it ever feel like tryingto find a home you can actually
afford is, like I don't know,some kind of intense competitive
sport these days?
Speaker 2 (00:08):
Huh yeah, you're definitely not alone in feeling
that.
Speaker 1 (00:11):
Well, you're probably not imagining it, we're going
to dive deep into the verylatest US home price trends
today.
Speaker 2 (00:17):
Exactly.
We've got the the brand newdata fresh off the press for Q1
2025.
This comes from the NationalAssociation of Realtors.
Speaker 1 (00:26):
Nair right.
Speaker 2 (00:28):
And our mission today really is to unpack this.
We want to go beyond just the.
You know the raw numbers.
Speaker 1 (00:33):
Yeah, get into what's really happening.
Speaker 2 (00:35):
Right.
Pinpoint the shifts.
Understand the very differentstories playing out across the
country, region by region.
Speaker 1 (00:42):
And what it all means for affordability, which is the
big question for so many folks.
Speaker 2 (00:45):
Precisely.
What does this actually meanfor your ability to afford a
home?
Speaker 1 (00:49):
Right.
So forget trying to wadethrough those.
You know dense reports yourself.
We're here to pull out the mostimportant stuff, the key
insights, maybe even somesurprising facts.
Speaker 2 (01:00):
Yeah, hopefully give you a really clear picture of
what the housing market lookslike right now.
Speaker 1 (01:03):
Okay, let's do it.
So kick us off.
What's the big headline fromthis latest NAR report?
Speaker 2 (01:09):
Well, the main takeaway, the big picture, is
that home prices they're stillgoing up in most parts of the US
.
They'll go up, Okay.
Specifically, 83% of the metromarkets that NAR tracks saw home
prices increase in the firstquarter of 2025.
Speaker 1 (01:23):
83%.
That's a lot of cities.
How many is that?
Speaker 2 (01:28):
That works out to 189 out of the 228 cities they look
at.
Speaker 1 (01:31):
Wow, okay, so widespread increases are
definitely still the norm, but Ithink I caught something there.
83%, wasn't it higher last?
Speaker 2 (01:39):
quarter Good catch.
Yes, that's a really importantnuance actually.
In the last quarter of 2024,that figure was 89%, so we've
seen a slight dip.
Speaker 1 (01:49):
So what does that dip tell us?
Less intense increases.
Speaker 2 (01:52):
Exactly.
It suggests that well, theoverall upward trend is still
there.
Prices are still rising broadly, but the intensity might be
starting to moderate just a bit.
Fewer markets seeing thosereally rapid jumps.
Speaker 1 (02:03):
Okay, that makes sense.
And what about the nationalmedian price itself?
Where does that stand now?
Speaker 2 (02:07):
The national median price for a single-family
existing home is now $402,300.
Speaker 1 (02:13):
Oof Over $400,000 for the median.
That's a milestone.
Speaker 2 (02:17):
It is.
It's a significant number.
Speaker 1 (02:19):
And how does that stack up against, say, this time
last year?
Speaker 2 (02:22):
So that $402,300 figure.
It represents a 3.4% increaseyear over year.
Speaker 1 (02:28):
Okay, 3.4%.
Speaker 2 (02:30):
And here's where it gets even more interesting.
Speaker 1 (02:32):
Yeah.
Speaker 2 (02:33):
Linking back to that intensity point Right, this rate
of increase, the 3.4%.
It's actually slower than whatwe saw in the fourth quarter of
2024.
Back then the year-over-yearincrease was 4.8%.
Speaker 1 (02:45):
Ah okay, so price is still going up compared to last
year, but the speed at whichthey're rising has slowed down a
bit compared to the end of lastyear.
Speaker 2 (02:52):
Precisely, the data really points towards a gradual
cooling, not slamming on thebrakes, but maybe easing off the
accelerator.
A touch on that national level.
Speaker 1 (03:01):
Okay, easing off the accelerator, like that.
So upward pressure is stillthere, broadly speaking, but
maybe not quite as forceful.
Speaker 2 (03:07):
That's a good way to put it.
Speaker 1 (03:08):
But I think I saw in the report that some places are
still seeing really big jumpsright, Despite this national
cooling trend.
Speaker 2 (03:15):
Oh, absolutely, you really have to zoom in.
While the national picturegives us that broad view, the
local level can be well,completely different.
Right, we actually saw 26 metroareas, 26, that recorded
double-digit price growth overthe year.
Speaker 1 (03:30):
Double digits Okay, so things are still very hot in
some pockets.
Speaker 2 (03:33):
Very hot.
These are the markets where,yeah, things are still heating
up quite significantly.
Speaker 1 (03:37):
Can you give us an example or two?
Where are we seeing that kindof growth?
Speaker 2 (03:43):
Sure Syracuse, New York, for example, it saw a
pretty remarkable 17.9% increasein home prices.
Speaker 1 (03:48):
Wow, nearly 18%.
Speaker 2 (03:50):
Yeah, and Montgomery Alabama also stood out with a
16.1% rise Very significant.
Speaker 1 (03:57):
Syracuse and Montgomery Interesting.
So what's the deal with placeslike these?
What's driving such big pricesurges there, kind of against
the national grain.
Speaker 2 (04:04):
Well, often what we see is these are maybe smaller
metro areas or regions that,historically speaking, might
have been considered undervaluedcompared to the big coastal
cities, for instance, so they'rebenefiting from a mix of things
.
Usually, greater affordabilityis a big one, drawing people in.
Speaker 1 (04:20):
Right People seeking value.
Speaker 2 (04:22):
Yeah, and then you often have local job markets
growing, which increases demand,and sometimes it's also about
migration people moving frommore expensive states looking
for, you know, more bang fortheir buck.
Speaker 1 (04:33):
Well, it makes a lot of sense.
People chasing affordabilityfinding jobs.
It increases competition,drives up prices.
Speaker 2 (04:39):
OK, it's that classic supply and demand playing out
very locally.
Speaker 1 (04:43):
Now you mentioned regional differences.
The report used this phrase atale of four Americas, I think.
Tell us about that.
Speaker 2 (04:51):
Exactly, yeah, if we kind of connect these local
hotspots to the broadergeographic patterns, you really
do see these distinct trendsacross the four major US regions
.
Speaker 1 (05:00):
OK, so let's break that down.
Where should we start?
Let's start with the South.
Speaker 2 (05:02):
It's huge right.
Okay, so let's break that down.
Where should we start?
Let's start with the.
South.
It's huge right.
It accounts for the largestshare of existing home sales
almost 45% of the total market.
Speaker 1 (05:09):
Nearly half the market.
Wow.
So with that much activity,prices must be booming there too
.
Speaker 2 (05:14):
Well, interestingly, no, not quite.
Despite a lot of areas in theSouth having really strong job
creation, which you'd thinkwould push prices up, the region
overall saw pretty modest pricegrowth, just 1.3 percent year
over year for the region as awhole.
Speaker 1 (05:29):
Only 1.3 percent.
Why so low, especially with jobgrowth?
Speaker 2 (05:33):
A key factor seems to be new home construction.
Yeah, there's been asignificant increase in building
activity across much of theSouth.
Speaker 1 (05:40):
Ah, so more supply coming online.
Speaker 2 (05:43):
Exactly.
More inventory means morechoices for buyers.
It helps to absorb some of thatdemand and stabilize prices.
Less frantic bidding, perhaps.
Speaker 1 (05:51):
Right, more supply eases that competitive pressure
cooker Okay, interesting.
What about the Northeast?
My gut feeling is that it'sgenerally pricier up there.
Speaker 2 (06:00):
Your gut feeling is correct.
It is generally a higher costregion and the data really backs
that out.
The Northeast actually saw thehighest price growth of any
region in Q1.
Speaker 1 (06:09):
Highest, how high?
Speaker 2 (06:10):
10.3%.
Speaker 1 (06:11):
Wow over 10%.
So much for cooling.
Speaker 2 (06:13):
Yeah, it really highlights how tight supply can
drive prices up, even in marketsthat are already expensive.
If there just aren't enoughhomes for the people who want
them, prices can still surge Bigtime.
10% in the Northeast that'syeah, that's a big jump.
Okay, what about the other tworegions, midwest and West?
So the Midwest saw arespectable price rise 5.2%,
(06:36):
pretty solid.
And the West it, recorded amore moderate gain, 4.1% 4.1% in
the West.
Speaker 1 (06:43):
Yeah.
Speaker 2 (06:43):
And for the West.
You know it's worth thinkingabout this in context.
Some markets out West sawpretty significant slowdowns
earlier in this whole housingcycle, so this 4.1% might
actually be seen as a bit of arecovery or stabilization in
those areas.
Speaker 1 (06:56):
Okay, so a real patchwork quilt across the
country, then not one singlestory.
Speaker 2 (07:01):
Definitely not Very diverse.
Speaker 1 (07:02):
Okay, let's shift gears a bit.
Let's talk about the reallyhigh-end markets.
California always seems todominate that conversation,
right?
Speaker 2 (07:08):
It certainly does, and this report no exception.
It continues a verywell-established trend.
California is home to get thiseight of the 10 most expensive
housing markets in the entirecountry.
Speaker 1 (07:18):
Eight out of 10.
Still, wow, who's at the top?
Speaker 2 (07:22):
Leading the pack.
Sunnyvale, santa Clara, theheart of Silicon Valley.
Speaker 1 (07:26):
Okay, brace myself.
What's the median price?
An astounding $2.02 million $2million for a median single
family home.
Speaker 2 (07:36):
Yep, and that's up nearly 10%, 9.8% to be exact,
just over the last year.
Speaker 1 (07:41):
Incredible, just incredible.
Which other California spotsare in that top tier.
Speaker 2 (07:45):
Well, right behind San Jose is Anaheim, Santa Anna,
Irvine, down in Orange CountyMedian there is $1.45 million.
Speaker 1 (07:52):
Still way up there.
Speaker 2 (07:53):
Oh yeah, up 6.2% year over year.
Then you got San FranciscoOakland Hayward at $1.32 million
, although interestingly itsincrease was more modest, just
1.5 percent.
San Diego-Carlsbad also brokethat million-dollar mark 1.04
million-dollar median and thatwas up 5.7 percent.
Speaker 1 (08:11):
Okay, and the report mentioned others too, right,
salinas-oxnard?
Speaker 2 (08:14):
That's right.
Salinas-oxnard, san Luis Obispoand the Los Angeles metro area
are also in that top 10 list ofmost expensive markets, all in
California.
Speaker 1 (08:22):
So California really is just its own world when it
comes to these high home values.
Pretty, much.
Were there any super expensivemarkets outside of California
that caught your eye in thereport?
Speaker 2 (08:33):
Yes, a couple definitely stood out Urban
Honolulu in Hawaii.
Medium price there $1.165million.
Speaker 1 (08:40):
Okay, another million plus market.
Speaker 2 (08:42):
And Naples, Florida, down on the Gulf Coast, comes in
at $865,000 for the median.
Speaker 1 (08:48):
Naples, right.
So what do places like Honoluluand Naples have in common with
those California hotspots?
Speaker 2 (08:54):
Well, often it's a similar story right Very high
demand desirability, but alsosignificant limits on new supply
.
Geographical constraints likebeing on an island, or coastal
regulations can really restricthow much new housing can be
built.
Speaker 1 (09:08):
Right Limited land high demand.
Okay, now let's flip the coin.
The report also said nearly 17%of metro areas actually saw
prices go down in the firstquarter.
Speaker 2 (09:17):
That's correct, almost 17%.
Speaker 1 (09:19):
Is that a worry?
Should we see that as a redflag for the market?
Speaker 2 (09:23):
It's a fair question Seeing more markets with price
declines up from about 11percent.
The previous quarter mightsound a bit concerning at first
glance, but the context NARprovides is really key here.
The report suggests this ismuch more likely a sign of
market rebalancing rather than,you know, the start of some kind
of widespread crash.
Speaker 1 (09:43):
Rebalancing, not crashing, Rather than you know,
the start of some kind ofwidespread crash Rebalancing,
not crashing.
Speaker 2 (09:45):
Okay yeah, think about it.
Many of these areas sawabsolutely explosive price
growth during the pandemic years, just unsustainable rates.
So what we're likely seeing isa natural correction, or maybe
the market just kind of catchingits breath as demand cools off
a bit from those frantic levels.
Speaker 1 (10:00):
Okay, so more like a leveling off in places that
maybe got way too hot too fast,rather than a signal of some
major downturn ahead.
Speaker 2 (10:07):
That seems to be the interpretation.
Yes, right, a normalizationperhaps.
Speaker 1 (10:11):
Did the report give any examples of markets like
that, Places where prices may bedipped but might be starting to
bounce back now?
Speaker 2 (10:17):
Yes, actually Several markets fit that description,
places like Boise, idaho, lasVegas, nevada, salt Lake City,
utah.
Speaker 1 (10:26):
Okay, markets that were definitely hot previously.
Speaker 2 (10:28):
Exactly, and even some of those really expensive
California markets we mentioned.
Like San Francisco and alsoSeattle Washington, these places
had seen some price decreases,but the latest data shows
indicators that they might bestarting to rebound somewhat.
Speaker 1 (10:42):
Interesting.
So even where prices cooled,the underlying demand might
still be strong enough to bringthem back up again.
It suggests that, yes, that thefloor might be higher than some
feared in those markets.
Ok, good to know.
Now all this talk about pricesgoing up, sometimes down,
sometimes cooling.
It all comes back to onecritical thing for most people
(11:02):
affordability.
Speaker 2 (11:03):
The million dollar question or maybe the million
dollar question, or maybe the $2million question in San Jose.
Speaker 1 (11:07):
Huh, right.
So what did the latest datatell us about how attainable
homeownership actually is rightnow?
Speaker 2 (11:15):
Well, no surprise here Affordability is still a
major, major hurdle for a lot offolks.
Speaker 1 (11:19):
Yeah.
Speaker 2 (11:19):
You've got mortgage rates.
The 30-year fixed rate has beenkind of bouncing around between
, say, 6.6% and just over 7%.
Speaker 1 (11:27):
It's significantly higher than a few years ago.
Speaker 2 (11:29):
Oh, absolutely.
And that cost of borrowingmoney.
It has a huge direct impact onyour monthly payment and just
how much house you canrealistically afford.
Speaker 1 (11:38):
So how does that translate into actual dollars?
What's the typical monthlymortgage payment looking like
now?
Speaker 2 (11:45):
OK, so for a typical existing single family home,
assuming a buyer puts down 20percent, which is a big
assumption, we'll get to that.
Speaker 1 (11:52):
Right.
Speaker 2 (11:52):
The average monthly principal and interest payment
is hovering around two thousandone hundred and twenty dollars.
Speaker 1 (11:57):
Twenty one, twenty a month, and how does that compare
to last year?
Speaker 2 (12:00):
That's up four point one percent compared to the
first quarter of twenty twentyfour.
So still rising year over year.
That's up 4.1 percent comparedto the first quarter of 2024.
So still rising year over year.
Ok, though interestingly it'sactually down just a tiny bit
like two dollars from theprevious quarter, q4 2024.
Speaker 1 (12:14):
Two dollars.
Well, I guess every little bitcounts.
Maybe Doesn't sound like muchrelief, though.
Speaker 2 (12:18):
No, it's hardly noticeable relief, practically
speaking.
Speaker 1 (12:21):
And what does that two thousand one hundred twenty
dollar payment mean in terms ofpeople's budgets?
What slice of their income isgoing to the mortgage?
Speaker 2 (12:28):
Right now.
The report estimates thathouseholds are spending about
24.4% of their income on thatmortgage payment.
Speaker 1 (12:35):
Okay, almost a quarter of their income.
Speaker 2 (12:36):
Yeah, which is actually a slight improvement
from the 24.8% it was in thefourth quarter, so again a tiny
bit of easing, but stillhistorically high.
Speaker 1 (12:46):
But you mentioned the 20% down payment.
That picture probably looksquite different for first-time
buyers, right?
They often have less to putdown.
Speaker 2 (12:53):
Exactly.
The situation is considerablytougher for people trying to get
into the market for the firsttime.
They're often dealing withsmaller down payments, maybe
facing student debt, and they'remore sensitive to those
interest rate moves.
Speaker 1 (13:05):
So what does affordability look like
specifically for them?
What's a starter home costing?
Speaker 2 (13:10):
Okay, so the average price for what NAR considers a
starter home is around $342,000nationally 342,.
Speaker 1 (13:19):
Still a big number.
Speaker 2 (13:20):
It is, and if you assume a more typical 10% down
payment for a first-time buyer,that estimated monthly mortgage
payment jumps to about $2,079.
Speaker 1 (13:29):
Wow, almost the same payment as the overall median
home, but with half the downpayment on a cheaper house.
That's rough.
Speaker 2 (13:36):
It really shows the impact of that down payment and
potentially mortgage insuranceand that $2,079 payment also up
4.1% year over year.
Speaker 1 (13:46):
Okay, and the income slice.
What percentage of their incomedoes that eat up?
Speaker 2 (13:51):
Here's the really stark figure that payment
consumes nearly 37% of a typicalfirst-time buyer household's
income 37% just for the mortgagepayment.
Speaker 1 (14:01):
Principal and interest Just principal and
interest Doesn't include taxes,insurance, maintenance.
Wow, nearly 40% of your incomejust gone on the mortgage
payment.
Principal and interest, justprincipal and interest.
Speaker 2 (14:05):
Doesn't include taxes , insurance, maintenance Wow,
nearly 40% of your income justgone on the mortgage payment.
That sounds incredibly tight.
That doesn't leave much roomfor anything else.
Speaker 1 (14:13):
It's incredibly tight .
It makes getting that foot onthe property ladder really
really difficult for a lot ofyoung people and families.
And here's another statisticthat really drives it home To
comfortably afford that mortgagewith a 10% down payment, you'd
need a household income of atleast $100,000.
Speaker 2 (14:29):
A hundred grand income.
Speaker 1 (14:30):
In 45% of the metro market's NAR tracks.
Almost half the countryrequires a six-figure income
just to get in with 10% down.
Speaker 2 (14:38):
And is that number going up?
Speaker 1 (14:45):
Yes, the number of markets requiring that $100K
plus income is increasing, manOK.
So buying a home, especially ifyou're just starting out, it
really requires a pretty heftyincome in a huge part of the
country now.
Speaker 2 (14:54):
It does.
The bar is significantly higherthan it used to be.
Speaker 1 (14:57):
So let's try to wrap this all together.
We've covered a lot of ground.
What real wealth?
And in an economy that can feela bit volatile sometimes?
Speaker 2 (15:27):
having that equity in your home provides a pretty
significant degree of financialstability for many families.
Speaker 1 (15:32):
That's definitely encouraging if you're already in
the market, but what about theother side, the folks trying to
get in?
Speaker 2 (15:36):
Yeah, For prospective buyers.
Let's be honest, the path isstill really challenging.
There's no sugarcoating that.
However, there are maybe someglimmers of hope, depending on
where you are the signs ofcooling prices in some areas,
that slight stabilization inmortgage payments we saw, even
if tiny.
Speaker 1 (15:54):
Yeah.
Speaker 2 (15:54):
And the potential for more inventory coming online,
especially with new constructionin regions like the South, it
could start to create someopportunities.
Speaker 1 (16:02):
So not easy, but maybe slightly less impossible
than it felt six months ago insome places.
Speaker 2 (16:07):
Perhaps, yeah.
But it really, reallyunderscores how vital it is to
look beyond the nationalheadlines.
You have to focus intensely onyour specific local market
conditions.
Speaker 1 (16:19):
Because what's happening nationally might be
totally different from your cityor even your neighborhood.
Speaker 2 (16:24):
Absolutely.
The national average is justthat, an average.
Your local reality could bevastly different.
Speaker 1 (16:28):
Okay, that's a crucial point.
So just to quickly recap ourdeep dive then home prices still
mostly going up across the US,but definitely slower than
before.
Speaker 2 (16:37):
Yep, the pace has eased.
Speaker 1 (16:38):
Big differences between regions, that tale of
four Americas Northeast hot,south cooling thanks to building
Midwest and west somewhere inbetween.
Affordability Still a hugeissue, a major concern,
especially for first-time buyersneeding that six-figure income
in so many places.
Speaker 2 (16:56):
The biggest hurdle, for sure.
Speaker 1 (16:57):
But there are some early signs maybe of
stabilization or even pricessoftening in certain markets
that got overheated.
Speaker 2 (17:03):
Right, some rebalancing occurred.
Speaker 1 (17:05):
Okay, that covers a lot.
Speaker 2 (17:06):
It's a complex picture, constantly evolving,
and you know this really leadsto a final thought.
Maybe a question for you, ourlistener, to chew on.
Okay, given everything we'vetalked about these national
trends, the cooling pace, theregional variations, but also
knowing how intensely local realestate is, what specific
(17:27):
factors do you think willactually have the biggest impact
on housing affordability rightwhere you live, in your specific
area, over the next year or so?
Speaker 1 (17:37):
Good question.
Speaker 2 (17:37):
Yeah, really think about it.
Is it local job growth or maybejob losses?
Are there big new constructionprojects planned or underway?
Are people moving into yourtown or are they leaving?
Because ultimately, it'sprobably those very local
dynamics, more than anythingelse, that will shape your
housing reality going forward.
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com