The housing market is clearly shifting in 2025, with home price growth slowing significantly. New data from Homes.com shows prices rising at roughly half the pace of last year. From January through August, prices increased 3.5%, compared to 7% over the same stretch in 2024. As of August, the median single family home price reached $389,000, up 2.4% year over year or about $9,000.
The slowdown varies by housing type. Detached homes rose 2.1% from last August, townhome prices were flat, and condo prices fell 1.2%. While prices are still rising overall, the pace has cooled noticeably.
Even with slower growth, buyers haven’t rushed back. A growing number of homes for sale has created more choice for buyers while reducing sellers’ pricing power. At the same time, high mortgage rates continue to limit affordability, keeping many buyers on the sidelines and pushing homes to stay on the market longer.
That could change soon. Erika Ludvigsen of Homes.com notes that anticipated Federal Reserve rate cuts are already reflected in declining mortgage rates. If borrowing costs continue to ease and the job market holds steady, buyer activity could increase.
Regionally, the Midwest is leading price growth, with cities like Detroit, Milwaukee, Cleveland, and St. Louis seeing the strongest gains. Parts of the South and West are seeing price declines, driven by oversupply and affordability pressures.
Overall, prices are down in about one third of the nearly 1,000 metro areas tracked and many large markets are seeing little to no year over year growth. As these trends play out, NRV property owners may experience very different outcomes depending on location and property type.
In short, the market is balancing between pressure and opportunity. The next move will likely depend on interest rates, inventory levels and buyer confidence, both nationally and here in the New River Valley.
Source Inspiration: Homes.com
