In the first quarter of 2025, single-family existing home prices rose in 83% of metropolitan areas across the United States, with 189 out of 228 regions reporting increases.1 The median price for a single-family existing home reached $402,300, marking a 3.4% increase compared to the previous year.2 The Northeast saw the sharpest rise at 10.3%, followed by Midwest at 5.2%, West at 4.1%, and South at 1.3%.³

Strategies for Homebuyers and Real Estate Investors

"Increasing home prices can make it more difficult for prospective homebuyers and real estate investors to afford their ideal properties," said Brett Hively, Senior Vice President of Mortgage Capital Markets and Financial Strategist at Ameris Bank. "It is essential for them to analyze market trends, get prequalified for a mortgage, and seek homes in desired metros that fit within their budget and have strong investment potential. Another option is to explore homes in secondary markets, where there may be a greater supply of properties at more favorable prices."

Rising Home Prices and Fluctuating Interest Rates

Rising home prices, along with fluctuating interest rates, can exclude many buyers from the market. This trend is most significant in housing markets with limited inventory and high demand, where competition for available homes pushes prices even higher. Mr. Hively emphasizes the importance of monitoring interest rates while avoiding the temptation to time the market. "Financial experts do not anticipate significant changes in mortgage rates, but it is important to remember that interest rates under 7% are still below the 50-year average for 30-year mortgage rates.⁴ As of May 14, 2025, the average 30-year fixed rate mortgage is 6.84%, an increase of .08% from last week.⁵

Will Home Prices Continue to Rise?

Looking ahead, many potential homebuyers and real estate investors are asking a key question: will home prices will continue to rise in the coming months of 2025? Factors contributing to this dynamic include economic conditions, supply and demand data, interest rates, and demographic trends. While home prices are still increasing, the growth rate has slowed. Most experts anticipate further slowdowns as housing inventory rises and mortgage rates remain at or near their current levels.⁶


Sources:
^{1, 2, 3} https://www.nar.realtor/newsroom/more-than-80-of-metro-areas-posted-home-price-increases-in-first-quarter-of-2025
⁴ https://finance.yahoo.com/personal-finance/mortgages/article/is-it-a-good-time-to-buy-a-house-202100449.html
⁵ https://finance.yahoo.com/personal-finance/mortgages/article/mortgage-refinance-rates-today-wednesday-may-14-2025-080004161.html
⁶ https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Ameris Bank is not affiliated with nor endorses the National Association of Realtors, Yahoo, or Forbes.