Home prices rose in more than 80% of U.S. metro areas in the first quarter of 2025 — even as affordability remained stretched and fewer markets posted double-digit gains.

According to the National Association of Realtors (NAR), 189 of 228 metro areas (83%) saw year-over-year increases in the median price for existing single-family homes. That’s a slight decline from 89% in the fourth quarter of 2024.

The national median price rose 3.4% from a year earlier to $402,300. In contrast, the previous quarter saw a 4.8% annualized increase.

“Most metro markets continue to set new record highs for home prices,” NAR chief economist Lawrence Yun said in a statement. “In the first quarter, the Northeast performed best in both sales and price gains by percentage.”

Northeast leads price growth

The Northeast saw the strongest yearly price growth among U.S. regions at 10.3%, followed by the Midwest (+5.2%), West (+4.1%) and South (+1.3%).

Despite accounting for nearly 45% of the nation’s existing-home sales, the South lagged in price growth and saw sales decline.

Among all metro areas tracked, 11% recorded double-digit price increases, down from 14% in the previous quarter. And in the largest metro areas, the biggest annualized gains occurred in Syracuse, New York (+17.9%); Montgomery, Alabama (+16.1%); and Youngstown, Ohio (+13.6%).

California stands out for costs

Eight of the 10 most expensive metro areas were in California. The San Jose area remained the most expensive with a median price of more than $2 million. Other costly California metros included Anaheim, San Francisco and San Diego.

Beyond California, the metro areas of Honolulu, Hawaii, and Naples, Florida, also ranked among the priciest markets.

“Very expensive home prices partly reflect multiple years of home underproduction in those metro markets,” Yun said. “Another factor is the low homeownership rates in these areas, implying more unequal wealth distribution.”

Home prices fell in 17% of markets, up from 11% in the prior quarter.

Yun noted that some previously declining markets — including Boise, Idaho; Las Vegas; Salt Lake City; San Francisco; and Seattle — have started to rebound.

Others, such as Austin, San Antonio and several Florida metros, may follow suit as job growth continues.

Affordability remains a concern

Affordability improved marginally but remains strained. The monthly mortgage payment on a median-priced home with a 20% down payment was $2,120 — up 4.1% from a year ago.

That payment represented 24.4% of a family’s income, a slight improvement from the previous quarter.

First-time homebuyers faced similar trends. The monthly cost of a starter home (assuming 10% down) was $2,079, also up 4.1% from a year earlier. These buyers typically spent 36.8% of their income on housing.

To qualify for a 10% down payment mortgage, a family needed to earn at least $100,000 in nearly half of all markets. And only 3.1% of markets were affordable for households earning less than $50,000.

Despite a slowdown in overall Home Equity Conversion Mortgage (HECM) volume in the first quarter of 2025, Longbridge Financial contributed positively to parent company Ellington Financial.

Overall performance at Ellington saw $31.6 million in net income to common stockholders, up from $22.4 million the prior quarter. Longbridge posted a net loss of $1 million for the quarter.

However, reverse mortgage originator and servicer Longbridge “more than covered its proportional share” of adjusted distributable earnings (ADE) in the quarter, Ellington CEO Laurence Penn said on the earnings call. That’s despite what he called “lower seasonal origination volumes for HECM.”

Still, lower interest rates during the quarter, losses on interest rate hedges “led to slightly negative GAAP net income overall for the quarter at our Longbridge segment,” he added.

Despite lower volume on the HECM side of the business, the company continues to maintain stable performance with its portfolio of proprietary reverse mortgage loans sold under the “Platinum” brand, Penn said.

These volumes were “stable and their origination margins actually improved, providing further evidence of the growing demand for our prop reverse product,” he said. “In fact, in April, loan submissions in prop were considerably higher year-over-year.”

Ellington CFO J.R. Herlihy framed Longbridge’s performance similarly, saying that Longbridge “had positive contributions from both servicing driven by a net gain on the [HECM-backed Securities (HMBS) mortgage servicing rights (MSR)] and from originations driven by higher origination margins for prop reverse, and steady margins for HECM despite seasonally lower origination volumes in HECM quarter-over-quarter.”

The Longbridge portfolio increased by 31% sequentially to $549 million, which Herlihy said was driven “by proprietary reverse mortgage loan originations.”

In terms of total originations, Herlihy said that the company “originated $420 million combined in HECM and prop in Q4 [2024], down to $340 million in Q1,” which he said is largely seasonally-driven. Margins held up during the quarter, and the spring selling season appears to look good on the company’s proprietary side, he said.

While the company did not announce any reverse securitization deals in Q1, Penn added that they expect one could be announced “soon.” The company last announced such a deal in December.

Some looming questions from last quarter’s earnings calls were not addressed. Penn in February spoke about “some other products for seniors that may not technically be reverse mortgages but have a lot of similar characteristics.”

“I don’t want to give away too much, but [there are] a lot of ways with the relationships we have with the compliance program that is, I would say, unique to the reverse mortgage originators that have to do so much more when dealing with seniors, for example.”

However, Longbridge did recently announce the “Platinum Peak” product suite, which aims to offer higher available loan-to-value (LTV) ratios designed to translate into higher loan proceeds for borrowers. Peak also updates seasoning requirements for Platinum-to-Platinum or proprietary-to-Platinum transactions to 24 months, from one closing date to the next.

Peak could also potentially help company partners to reconnect with clients who had previously been short to close, according to Melissa Macerato, chief revenue and marketing officer in an interview last month.

“Internally, we found that there were over $500 million of loans that were short to close in our wholesale and retail divisions,” she said at the time. “We are helping our wholesale partners and loan officers to look at their lead pipelines and evaluate the opportunity to go back and help borrowers who they weren’t previously able to help. And we are working with our partners to help identify loans in the pipeline that could benefit from the new product.”

The heated debate around the Clear Cooperation Policy (CCP) has roiled the real estate brokerage space as a result of fierce pushback on the rule from Compass.

But company CEO Robert Reffkin has a question amid what he characterized as “negative narratives and scare tactics.” What’s the downside for a home seller of Compass’s “three-phase marketing” strategy?

On Compass’s first-quarter 2025 earnings call on Thursday, Reffkin opened by doubling down on the company’s opposition to CCP. He reiterated his belief that sellers deserve to have a choice in how their property is marketed. And he answered his own proverbial question.

“There is no downside,” he said. “The worst thing that happens is a homeowner gets an offer, and they have an opportunity to turn it down and go to the public sites with the benefit of price discovery from pre-marketing. That’s the downside, which means there is no downside.”

CCP is a rule from the National Association of Realtors (NAR) that requires Realtors to place a listing on a NAR-affiliated multiple listing service (MLS) within 24 hours of the property being marketed elsewhere.

This process serves as an obstacle to Compass’s mission to build an inventory of exclusive listings, as it forces listing agents to choose between Compass’s website and the MLS. And with Zillow adopting its own version of CCP, choosing against the MLS also means choosing against Zillow.

The drama around CCP hasn’t prevented Compass from growing. The company’s market share hit an all-time high, rising from 4.47% a year ago to 6% of all home sales in Q1 2025. Its principal agent count jumped to 20,656 at the end of March, a 41.6% annual increase.

That increase is primarily driven by the company’s acquisition of Christie’s International Real Estate and @properties in December, in which Compass paid with $150 million in cash and roughly 44 million shares of its stock.

Revenue rose from $1.1 billion in Q1 2024 to $1.4 billion in Q1 2025. Operating cash flow was positive for the fifth quarter in a row, hitting $23 million. Still, the company suffered a net loss of $51 million, although that’s down considerably from the $132 million loss in the same quarter last year.

Reffkin acknowledged on the call that economic headwinds are impacting the housing market. The threats of tariffs from President Donald Trump in March — and the actual tariffs he implemented in April — are affecting consumer behavior, although he believes that the market will be in line with 2024.

While the real estate industry is pushing back on Reffkin’s assault on CCP, Compass’s three-phrase marketing plan is taking hold. The percentage of its listings that are “Private Exclusives,” which is the first stage, has steadily increased. 

These listings do not appear on Compass’s site, but if they’re not sold during that period, they enter the second stage called “Coming Soon,” which does place them on the site. In the third phase, the listing goes on the MLS and third-party sites.

RBA Governor Michele Bullock is expected to cut rates. Picture: NewsWire / Nikki Short

Aussies have had a massive upswing in property confidence after three quarters of falls the latest survey found, as one of Australia’s biggest banks tips a return to pandemic era rates.

The NAB Residential Property Index, released Friday, surged to ‘well above average +40 in March, after moving lower in the previous three quarters” – with the expectation that it will hit 51 in the next 12 months and 54 in two years.

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NAB Residential Property Index. Source: NAB

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NAB executive chief economist Sally Auld expects easing interest rates to support growth and the economy to have a “soft landing” with inflation settling around the middle of the RBA’s target band by the second half of this year and unemployment staying below 4.5pc.

“That said, there are building cross winds in the global economy and weaker global growth is likely to be a negative for Australian growth and also disinflationary. That means, the RBA will need to normalise rates more quickly and potentially ease rates further to provide some additional support. Therefore, we now see the RBA cutting to 3.1pc by August and then taking the cash rate to 2.6pc by early-2026.”

The cash rate target was last at 2.6pc in October 2022 – which was at the tail end of pandemic lockdowns.

NAB Residential Property Index: States. Source: NAB

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NAB head of home lending Denton Pugh said “house prices are on the rise again, with the market picking up across most of the country over the March quarter”.

“The NAB Residential Property Index rose to +40, showing that people are feeling much more positive about the housing market,” he said.

“With the Reserve Bank cutting interest rates in February, we’re seeing lending activity pick up across the board encouraged by improved conditions and lower interest rates.”

“We expect more buyers to return to the market throughout 2025 and prices to continue their modest gains into the winter months – especially in capital cities where homes are still in short supply.”

Property Clock Q1 2025. Source: NAB

Mr Pugh said housing affordability and supply were long-term challenges that needed long-term solutions.

“It’s encouraging to see governments prioritise housing, but there’s still a long way to go,” Mr Pugh said. “There’s no simple fix, solving Australia’s housing challenges will take collaboration across the board.”

“Business, government, and community groups need to work together to create more opportunities for Australians to find affordable homes.”

The post Big bank’s huge rates call amid property confidence spike appeared first on realestate.com.au.

‘She Sells Sea Shells’ by Multiplicity has been short-listed for the 2025 Houses Awards. Picture: Trevor Mein

A bathroom cabinet made from seashells and an upside down periscope are among quirky features that could see a Surf Coast beach pad named Australia’s best house.

The aptly named ‘She Sells Sea Shells’ by Multiplicity is among three standout local projects short-listed for the 2025 Houses Awards.

A bunk room for the kids is just about the only conventional feature of the Aireys Inlet getaway, which has retro carpet on the walls, instead of the floors, and a brick island bench.

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‘She Sells Sea Shells’ by Multiplicity has been short-listed for the 2025 Houses Awards. Picture: Trevor Mein

Shells are an unusual choice for the bathroom cabinet. Picture: Trevor Mein

Retro carpet features on the wall. Picture: Trevor Mein

The house, described as unpretentious and fun, has been short-listed in the New House under 200sq m category.

Mid-century design elements also inspired the another contender along the Great Ocean Road, Anglesea House by Eckersley Architects.

The two-storey residence featuring charred timber and natural stone aims to create a light environmental footprint through a gas-free design with solar heating and cooling.

Huge tracts of glass on both side of the main living pavilion frame uninterrupted views over the surrounding landscape.

The house is a contender in the New House over 200sq m category.

Anglesea House by Eckersley Architects has charred timber cladding. Picture: Tasha Tylee

Drought-tolerant gardens are part of the environmentally conscious Anglesea House by Eckersley Architects. Picture: Tasha Tylee

Houses Magazine editor and awards jury chair Alexa Kempton said the short-listed homes pioneered bold new ideas, with many embracing “the radical idea of doing less”.

“Many of this year’s short-listed homes show us that we should be designing smarter, rather than bigger,” Ms Kempton said.

“Increasingly, we see architects telling clients ‘you don’t need more space – you need better design’.

“The jury observed modestly scaled new houses as well as clever interventions to existing homes and applauded this continued emphasis on responsible residential design.”

The region’s third short-listed project, a striking concrete home in a designated Otways bushfire “flame zone” punches above its small footprint despite initially being deemed unbuildable.

Otway Beach House at Yuulong, has earned Kerstin Thompson Architects a spot on the Houses Awards shortlist. Picture: Sharyn Cairns

The incredible view from Otway Beach House by Kerstin Thompson Architects. Picture: Sharyn Cairns

Kerstin Thompson Architects designed the year-round coastal retreat, which is short-listed in the New Homes under 200sq m category.

Bush-fire resilient materials of concrete and fire-rated glazing earned a green light from planners to construct the boxlike home, which is softened by blackbutt-lined interior walls and joinery.

The winners of the 2025 House Awards will be announced at a gala event on August 1, with one home from across the nine categories to be named Australian House of the Year.

The post 2025 Houses Awards: Quirky Great Ocean Road beach pad short-listed appeared first on realestate.com.au.