US Housing Market Shifts: Declines in South, Gains in Northeast and Midwest

The US housing market has hit a record total value of 55.1 trillion dollars as of June 2025 according to recent data from Zillow, reflecting a 57 percent increase since early 2020. However, recent months show a slowdown in growth, with national housing wealth rising just 1.6 percent in the past year compared to the rapid acceleration seen from 2020 to 2022. Regionally, the market is shifting. While southern states like Florida, California, and Texas that experienced a pandemic boom are now declining in housing market value, states in the Northeast and Midwest are seeing gains. Notably, New York added 216 billion dollars in value over the last year, accounting for one quarter of the national growth, with New Jersey, Illinois, and Pennsylvania also posting strong increases.

National housing inventory is still 13 percent below pre-pandemic levels, but 12 states now exceed historical inventory benchmarks. Listings are staying on the market longer as buyers remain priced out by elevated mortgage rates, now averaging just below 6.7 percent. The median listing price in July reached 439,450 dollars, but the average buyer with median US income can only afford homes priced up to 298,000 dollars. As a result, 7 out of 10 home shoppers are currently priced out of the market. Across half of major US cities, home prices dropped 3 to 4 percent year over year, most notably in Los Angeles and Washington DC, where homes are increasingly selling below asking price.

Investor activity is high, making up about a third of all transactions, as moderate price declines and rising inventory present new opportunities. At the same time, the affordability crisis persists; buyers now need about 200,000 dollars more than a decade ago to purchase a median-priced home. Homebuilders have helped boost first-time owner numbers, but many deals remain difficult to close due to mismatched buyer and seller expectations.

Industry leaders are responding by preparing for potential rate cuts from the Federal Reserve, which could further stimulate buyer activity. This evolving landscape, marked by cooling in former boom states and new strength in the Northeast, signals a period of adjustment rather than a market crash.

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Episode Transcript

Speaker 1 (00:00):
The US housing market has hit a record total value
of fifty five point one trillion dollars as of June
twenty twenty five, according to recent data from Zillo, refecting
a fifty seven per cent increase since early twenty twenty. However,
recent months show a slowdown in growth, with national housing
wealth rising just one point six per cent in the

(00:21):
past year compared to the rapid acceleration seen from twenty
twenty to twenty twenty two. Regionally, the market is shifting.
While southern states like Florida, California, and Texas that experienced
a pandemic boom are now declining in housing market value,
states in the Northeast and Midwest are seeing gains. Notably,

(00:43):
New York added two hundred sixteen billion dollars in value
over the last year, accounting for one quarter of the
national growth, with New Jersey, Illinois, and Pennsylvania also posting
strong increases. National housing inventory is still thirteen per cent
below pre pandemic levels, but twelve states now exceed historical

(01:04):
inventory benchmarks. Listings are staying on the market longer as
buyers remain priced out by elevated mortgage rates, now averaging
just below six point seven percent. The median listing price
in July reached four hundred thirty nine thousand, four hundred
fifty dollars, but the average buyer with medium US income

(01:25):
can only afford homes priced up to two hundred ninety
eight thousand dollars. As a result, seven out of ten
home shoppers are currently priced out of the market. Across
half of major US cities, home prices dropped three to
four percent year over year, most notably in Los Angeles
and Washington, d C, where homes are increasingly selling below

(01:46):
asking price. Investor activity is high, making up about a
third of all transactions, as moderate price declines in rising
inventory present new opportunities. At the same time, the affordability

(02:07):
crisis persists. Buyers now need about two hundred thousand dollars
more than a decade ago to purchase a median priced home.
Home Builders have helped boost first time owner numbers, but
many deals remain difficult to close due to mismatched buyer
and seller expectations. Industry leaders are responding by preparing for
potential rate cuts from the Federal Reserve, which could further

(02:31):
stimulate buyer activity. This evolving landscape, marked by cooling and
former boom states, and new strength in the Northeast signals
a period of adjustment rather than a market crash.