As summer begins, the U.S. housing market is entering a new phase. Prices are still rising in some metro areas while cooling off in others. Mortgage rates remain elevated, inventory is tight, and regional differences are defining how this season will unfold.
Where prices are still rising
Despite higher borrowing costs, demand remains strong in several key markets. Limited inventory and strong job growth are pushing home values higher, especially in the South and Southeast.
Top appreciating markets year-over-year as of May 2025:
- Miami, Florida: +9.4 percent
- Austin, Texas: +7.2 percent
- Charlotte, North Carolina: +6.8 percent
- San Diego, California: +6.3 percent
- Tampa, Florida: +5.7 percent
These markets continue to favor sellers, with multiple offers common on competitively priced homes.
Where the market is cooling off
Some of the hottest markets from 2021 and 2022 are now experiencing price pullbacks. More listings, fewer investors, and affordability concerns are contributing to slower demand.
Markets showing price declines:
- Boise, Idaho: –3.1 percent
- Phoenix, Arizona: –2.4 percent
- Salt Lake City, Utah: –1.8 percent
- Las Vegas, Nevada: –1.2 percent
Buyers in these areas are gaining negotiating power as days on market increase.
Mortgage rates remain a key factor
The average 30-year fixed mortgage rate is now 7.12 percent, according to Freddie Mac. That has a major impact on what buyers can afford. A typical monthly payment on a $400,000 home has increased by nearly $800 since mid-2021.
Housing analyst Diana Connors said the higher rates are forcing more buyers to consider smaller homes, alternate locations, or adjustable-rate mortgage options.
What to expect this summer
Housing experts say price trends will continue to diverge across regions. The South and Midwest may see moderate gains, while expensive Western metros face more pressure. Inventory remains low by historical standards, but it is gradually increasing. New listings are up slightly year-over-year in most major markets.
Real estate activity is also expected to pick up after the July 4 holiday, with many buyers trying to close deals before the start of the school year.
Bottom line
The housing market in 2025 is no longer defined by uniform growth. Buyers and sellers are seeing very different conditions depending on where they live. As mortgage rates stay high and affordability remains a challenge, local dynamics will shape the summer housing season more than national trends.
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