The United States is home to one of the biggest and most dynamic housing markets in the world. In 2025, the market was valued at 1.5 billion U.S. dollars in
–a figure only comparable with the Chinese market. House prices in the United States have grown steadily since 2012, with the
hitting nearly 18 percent during the housing boom in 2021. Nevertheless, price growth has been muted by the deteriorating housing affordability – a complex interplay between insufficient housing supply, income growth, and growing housing costs.
Where have homes appreciated the most?
Despite a slowdown, house prices continue to grow across most states. Hawaii, Delaware, and Rhode Island exhibited the steepest
annual home appreciation in the third quarter of 2024, with prices rising by over eight percent. Only Louisiana and the District of Columbia observed a small decrease. Rapid price increases can be attributed to insufficient supply where homes are needed the most. California, the state with the largest population and
second-highest house price, had notably fewer
construction starts per capita than the national average. Unsurprisingly, eight of the 10
metropolitan areas with the most expensive single-family house prices in the country are located in California.
Homebuyer sentiment and affordability
According to the
U.S. Housing Affordability Index, 2023 was the worst year for aspiring homeowners, with 2024 seeing only a minor improvement. While house prices have continuously grown in recent years, incomes have not followed at the same pace. That means that for aspiring homeowners, purchasing a home has become increasingly unaffordable. Soaring inflation and the increase in borrowing costs over the past three years have also played a significant role in eroding affordability. Since 2021,
homebuyer sentiment has plummeted, with Americans across all age groups agreeing that the current timing was not good for a home purchase. A 2024 survey among non-homeowners shows that respondents identified the high costs of living, insufficient savings, and low income as the leading
reasons preventing them from buying a home.
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Due to varying update cycles, statistics can display more up-to-date
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