US Housing Market Shows Signs of Stabilization in October 2025
The US housing market is demonstrating notable stabilization after months of volatility, according to the latest data released this week. National home prices have essentially flatlined, rising just 0.01 percent year over year between September 2024 and September 2025 based on the Zillow Home Value Index published recently.
The number of major metro areas experiencing price declines has peaked and begun to moderate. After reaching a high of 110 markets with falling prices in June 2025, that figure dropped to 105 markets by September 2025, representing 35 percent of the nation's 300 largest housing markets. This marks a reversal from the steady climb earlier in 2025, when declining markets increased from just 31 in January to the June peak.
The stabilization reflects shifting supply dynamics across the country. Inventory growth has stalled in recent months, halting the trend toward year over year price declines that characterized much of 2025. Regional variations remain stark. Housing markets in the Northeast and Midwest continue posting price gains, supported by active inventory levels that remain well below pre pandemic 2019 benchmarks.
Conversely, markets in Arizona, Texas, Florida, and Colorado are experiencing modest price pullbacks. These states share a common characteristic: active inventory now exceeds pre pandemic levels, tilting the supply demand balance toward buyers and applying downward pressure on prices.
The earlier surge in markets with falling prices reflected a gradual rebalancing as supply improved throughout the first half of 2025. Starting with 31 markets in January, the count grew to 42 in February, 60 in March, 80 in April, and 96 in May before peaking at 110 in June. The subsequent decline to 105 markets by September suggests the market correction may be moderating.
This stabilization arrives as mortgage rates hover near 2025 lows, potentially supporting buyer demand despite elevated prices compared to historical norms. The coming months will reveal whether this plateau represents a temporary pause or a more durable shift in market dynamics.
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This content was created in partnership and with the help of Artificial Intelligence AI