U.S. Home Prices Hit Record High, But Growth Slows

U.S. home prices hit a new record high this spring — but the pace of that growth is slowing as more sellers enter the market and buyers pull back amid persistently high borrowing costs.

According to Redfin’s latest housing market reports, the national median sale price rose to $440,997 in May 2025, up 0.7% year-over-year, marking the highest price ever recorded for this time of year.

In the four weeks ending June 15, the median sale price stood at $396,500, also an all-time high for that rolling period. Yet these record prices mask a cooling trend: annual price growth is now the slowest it’s been in nearly two years.

Supply Builds Up as Buyers Wait

The cause of the slowdown? Simple supply and demand. More Americans are listing their homes as the market enters peak season, loosening the tight inventory that propped up prices during the pandemic.

Active listings in May reached their highest point in five years, up 16.2% from last year, and new listings are still trending above last year’s levels.

Meanwhile, buyers remain hesitant. Mortgage rates hover just below 7%, keeping monthly payments near record highs.

Redfin’s data shows pending sales fell 1.5% year-over-year for the four weeks ending June 15, while mortgage applications dropped 3% in just one week. Many would-be buyers are hoping rates will drop before committing — though economists warn significant relief is unlikely this year.

Sellers Lose Some Power

With more homes for sale and fewer buyers competing, the balance of power is shifting away from sellers.

Fewer homes are selling above asking price: just 31.2% did so in May. That’s the lowest share for that month in five years. On average, homes are taking longer to sell too — 38 days in May, the slowest pace for May since 2020.

“Sellers no longer hold all the cards,” said Redfin senior economist Asad Khan. “The market has been moving in buyers’ favor for months, but the reality of high costs still makes affordability a big challenge.”

As listings sit longer, price cuts and negotiations have become more common. The typical sale price is about 6% below the median asking price, a reversal from the seller’s market highs of 2021 and 2022.

Regional Winners and Losers

Market trends, however, vary sharply by region. The Northeast continues to see the strongest price growth, led by Philadelphia (+10.9%), New Brunswick, NJ (+8.4%), and Providence, RI (+7.7%). Limited inventory is helping prop up prices there.

In contrast, parts of Florida, Texas, and California are cooling the fastest.

Prices dropped sharply in Oakland (-6.7%), Jacksonville (-5.2%), and Dallas (-4.6%) in May, according to Redfin. Florida metros like Miami and Orlando also saw significant slowdowns in sales and notable spikes in how long it takes to sell a home, as home insurance costs rise.

Detroit was the sole metro area where active listings fell in May. But New York’s Nassau County — one of the hottest and most expensive markets in the country in recent years — saw only a 1.9% growth in listings.

Cancellations Are Rising

In another sign of buyer caution, a record number of home sales fell through last month. Nearly 15% of pending sales were canceled in May — an all-time high for that month. Florida and Texas metros led the pack for cancellations: San Antonio (21.3%), Orlando (20%), and Jacksonville (19.7%) topped the list.

What’s Next?

Redfin forecasts that national home prices could start falling year-over-year by late 2025 if supply continues to outpace demand.

But for now, economists expect mortgage rates to remain near 7% through year-end, keeping many buyers sidelined and sellers adjusting expectations.

For buyers, this means a market where negotiation is back on the table. But as they gain more leverage, affordability challenges persist due to a long stretch of robust price growth and high borrowing costs.

And for sellers, strategic pricing and home condition are more important than ever to avoid lengthy listings and price cuts.