Q3 2025 U.S. Housing Market Sees Modest Affordability Gains Amid Price and Inventory Shifts

The third quarter of 2025 saw marginal improvements in home affordability in the U.S. housing market, influenced by slight moderation in price growth and an increase in housing inventory. The median age for first-time home buyers rose to 40, reaching an all-time high, amid persistent high interest rates and challenging price levels in many markets. Despite these challenges, a notable 2% decrease in average national list prices brought the median home price down to $432,600. This price adjustment impacts typical monthly payments for first-time buyers, estimated at around $3,300 given a 10% down payment. Significant price declines were observed in large metropolitan areas such as Los Angeles and Boston, where prices fell by 7%. The housing inventory rose nationally by 7% quarter over quarter and saw a substantial 21% increase compared to the previous year. Midwestern markets like Columbus, Detroit, Cincinnati, and Indianapolis experienced inventory increases exceeding 25%, potentially enhancing buyers' options. Inventory growth is a critical factor influencing buyer opportunities and market competition. These trends impact affordability calculations, which extend beyond list prices to include homeowners insurance, real estate taxes, and private mortgage insurance for those with less than 20% down payment. The data is derived from Realtor.com listings, adjusted for inflation using the U.S. Bureau of Labor Statistics consumer price index, and incorporates demographic, income, and mortgage rate information from national surveys and Freddie Mac. The insights provided are relevant to market participants assessing emerging housing trends, regulatory compliance with real estate disclosures, and economic conditions impacting mortgage underwriting and insurance considerations. Professionals in insurance and real estate finance may find these observations pertinent for forecasting market behavior, evaluating risk exposure, and understanding shifts in buyer demographics. Continuous quarterly updates support timely decision-making, highlighting subtle market fluctuations in price, inventory, and buyer characteristics. This information is vital for stakeholders seeking a comprehensive view of U.S. housing affordability dynamics in a fluctuating interest rate environment.