MW Home prices hit an all-time high, but some regions are seeing price declines

By Aarthi Swaminathan

The U.S. housing market is split between still-hot markets and areas where prices are cooling

Michelle Wilson waited nearly three years before buying her dream home.

The 41-year-old mother of two wanted a bigger house in a different neighborhood. She and her husband had bought their first home in 2012 in Stafford Springs, Conn., but wanted to be in suburban Tolland County, a half-hour drive from Hartford.

"We wanted to do it in 2022, and we backed out because the market went insane," Wilson told MarketWatch.

Two and a half years later, in April 2024, they contacted their real-estate agent, budgeting a maximum of $400,000 for a single-family home. But as time went on, home prices kept climbing in Hartford.

Wilson and her husband both ended up getting new jobs, and they also made a tidy profit from the sale of their previous home, so they decided to increase their budget. By October 2024, their previous home had appreciated over 12 years from $180,000 to $365,000, which they planned to put toward their new home. They put that money into a high-interest savings account and stayed with Wilson's sister while they looked for a new home.

They waited until more homes were listed for sale and in May, they pulled the trigger and bought a home listed for $409,900. The couple put $100,000 down as a deposit and a sign of their serious interest. Their real-estate agent knew the listing agent, so she put in a good word. The couple also waived appraisals and inspections, a practice that was more common during the pandemic but is less so nowadays.

They closed on the 2,100-square-foot, three-bedroom home in June for $456,000. Their 30-year mortgage rate was 6.6%, which they plan to refinance if rates come down. Wilson later learned that the home had had 40 showings.

"It was a process," she said, but added: "We're thrilled."

The couple's years-long odyssey to buy a home highlights the current reality that when it comes to real estate, it's a tale of two housing markets in America. The housing sector at the national level is mired in a deep slowdown, but local markets are bifurcating into two camps: Home prices are falling in many cities across the Sunbelt but are still rising briskly in the Midwest and Northeast.

Home prices "are hitting all-time highs, but sales are stuck at the cyclical low levels, [and] we believe it is due to elevated mortgage rates," Lawrence Yun, chief economist at the National Association of Realtors, said in a press call Wednesday.

The national housing market remains largely stagnant. Sales of existing homes fell to a nine-month low in June as buyers stayed out of the market. The market for many is still unaffordable, as home prices and mortgage rates remain high.

"Housing demand at the current pace is not picking up," Yun said.

"We have 7 million more Americans working. ... That should imply higher demand," he said. However, sales activity remains low, highlighting the persistent affordability crisis.

Existing-home sales fall in June

Sales of existing homes fell 2.7% in June from the previous month, according to the NAR, dropping to a 3.93 million pace. That's the number of homes that would be sold over an entire year if sales took place at the same rate in every month as they did in June. The numbers are seasonally adjusted.

Home sales were at the same level a year ago. The pace of sales in June was the lowest since September 2024.

The pace of sales fell short of the expectations of economists surveyed by Dow Jones Newswires and the Wall Street Journal, who expected home sales to fall to a 4 million pace in June.

Home prices reach a new record high in June

Against this backdrop, home prices grew nationally in June.

The median price for an existing home in June was $435,300, the NAR said, which is an all-time high. Home prices increased 2% from one year ago. Nationally, 21% percent of homes were sold above list price, which was down from 29% the same month a year ago. Homes received an average of 2.4 offers.

Record-high home prices reflect "years of undersupply" of housing, Yun said.

Great divergence in home-price trends

Home-price growth varied significantly based on region.

Home prices jumped the most in the Northeast in June, by 4.2%. The region has typically been supply-constrained. The median price of an existing home in the Northeast was $543,300, the NAR said.

The metropolitan areas that saw the highest annual home-price growth in June were Hartford, Conn., followed by New York City and Milwaukee, according to a monthly report from Intercontinental Exchange. Home prices in Hartford grew 7.3% from a year ago. They grew by 6.2% in New York City and 6.1% in Milwaukee.

Hartford is still seeing strong demand and home-price appreciation. Buyers purchasing homes in the area want to be close to their families, Julie Corrado, a Hartford-based real-estate agent with Coldwell Banker Realty, told MarketWatch. Corrado was Wilson's agent.

The greater Hartford area is cheaper than other parts of Connecticut, Corrado said, such as Greenwich and New Haven. The easier it is to commute into New York City, the more expensive homes are. Bidding wars were still common this past spring, she added, but have not been as common this summer.

In the South, meanwhile, home prices were up the least in June, rising just 0.3%. The region has seen a big increase in housing supply due to builders constructing new homes. The median price of an existing home in the South was $374,500.

Intercontinental Exchange's data revealed that in June, the metropolitan areas that saw the biggest drop in annual home-price growth were Austin, Texas; Tampa, Fla.; and Miami. Home prices fell 4.3% from a year ago in Austin, and fell 3.4% in Tampa and 2.6% in Miami, the company noted.

"When we see price decreases, it is likely due to competition in the market. It is crucial that homes are priced right, which may mean just at or slightly below what the market analysis suggests," Heather Brown, an Austin-based real-estate agent with Re/Max Fine Properties, told MarketWatch.

"The market has moved toward a balanced market, but buyers do have choices now and in many cases can and will negotiate," she added. "Sophisticated buyers realize this is a really good time to buy: Prices have stabilized, and competition has softened from the craziness we saw during the pandemic and until interest rates started to rise."

Homes linger on the market for longer

The NAR data also showed that listed homes remained on the market for 27 days on average, unchanged from May. Last June, homes sold more quickly, in 22 days.

Some sellers are responding to the slower pace of sales by cutting prices. In June, the share of homes that had their asking price reduced was about 27% nationwide, according to a report by the real-estate platform Zillow. That was the highest share for that month since Zillow began tracking the figure in 2018. The trend was most common in Denver, where 38% of home listings had a price cut, followed by Raleigh, N.C., and Dallas, both at 36%.

Home builders have also become far more aggressive in cutting prices to boost sales. This month, D.R. Horton (DHI), one of the biggest home builders in the country, said it expects to increase sales incentives in the fourth quarter if demand remains weak and mortgage rates stay high through the rest of the summer.

Read more: Pessimistic home builders are offering 'outrageous' incentives to lure buyers

Housing inventory rises across the U.S.

The total number of homes listed on the market in June rose 15.9% from last year, to 1.53 million units. There is a 4.7-month supply of unsold inventory, which is considered by the industry to be a balanced level.

All-cash buyers made up 29% of sales. The share of individual investors or second-home buyers was 14%, and 30% of buyers were first-timers.

Cancellations of home sales surged in June

Cancellations are also rising, as buyers get cold feet due to the uncertain economic outlook.

In June, about 15% of pending home sales fell through, up significantly from 13.9% last June, according to an analysis by the real-estate brokerage Redfin. That translates to about 57,000 home-sale agreements nationwide being terminated in June, the highest share for that month since 2017, when Redfin began tracking the data.

"Some buyers are canceling deals because another home pops up in the same price range that they like better, or because they discover a flaw and get nervous it'll cost too much to fix," Crystal Zschirnt, a Dallas-based real-estate agent with Redfin, said in the analysis.

"I've also heard of some buyers backing out because they're hoping home prices or mortgage rates are going to plummet soon, even though that's unlikely," she added.

Brown, the Austin agent, said she believes competition among buyers will return when rates drop to around 6%, "which will in turn start to drive prices up."

-Aarthi Swaminathan

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July 23, 2025 11:24 ET (15:24 GMT)

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