December 2025 Housing Market Report: Where Home Prices Fell, Where Sellers Cut, and Who Could Afford to Buy

The typical U.S. home rose 0.1% over the year to $366,588 in December, according to the home value index, and is up 34.3% over five years. A 20%-down mortgage on that home cost $1,794 a month in principal and interest and took about $95,781 of household income. Typical rent was $1,892, up 2.0% in a year. 21.7% of listings cut their price during the month, homes went pending in 65 days, and 1.24M homes were for sale, up 11.3% from a year earlier.

Underneath that average, the 50 states moved in different directions. Values were falling in 15 states and rising in 34; 26 states were at an all-time high while Arizona sat 8.8% below its July 2022 peak of $462,506. This report reads the state-level files for December 2025 as published, with no modeling and no forecasts.

The steepest year-over-year declines were in Florida (-5.1%), Arizona (-2.9%), Texas (-2.4%), Colorado (-2.4%), and Hawaii (-2.2%). Florida's typical home stood at $377,012, 6.8% below its May 2024 peak of $404,529. At the other end, North Dakota (+4.8%), Wisconsin (+4.7%), and Illinois (+4.3%) posted the fastest gains.

By region, the West carried the highest median state value at $476K and the Midwest the lowest at $269K. The West was down 0.5% on the median state, with values falling in 7 of its 13 states, the Northeast was up 2.7% on the median state, with values falling in 1 of its 11 states, the South was flat on the median state, with values falling in 7 of its 14 states, and the Midwest was up 3.4% on the median state, with values falling in 0 of its 12 states.

Price cuts are the earliest sign that a market is turning. Indiana (26.7%), Arizona (26.5%), Ohio (25.9%), Utah (25.6%), and Tennessee (25.5%) had the largest share of listings with a reduced price, all above the national 21.7%. The fewest cuts were in New York (13.6%), Wyoming (14.7%), and Montana (15.5%).

Combining price cuts with days to pending and the change in homes for sale, 9 states were cold, buyer's markets (Colorado, Utah, Nevada, Arizona, North Carolina, Tennessee, Georgia, South Carolina, and Texas) and 0 were hot, seller's markets. Florida had the slowest sales at 97 days to pending; Connecticut the fastest at 34.

The income-needed figure assumes 20% down at that month's rates and a payment of no more than 30% of income. Set against each state's median household income from the Census Bureau, the typical household could afford the typical home in 13 of 50 states: West Virginia, Iowa, Mississippi, Alabama, Arkansas, Indiana, Ohio, Oklahoma, Kansas, Kentucky, North Dakota, Michigan, and Missouri. The widest gaps were in Hawaii (needed $193K, median earns $101K), California (needed $190K, median earns $100K), and Massachusetts (needed $169K, median earns $105K).

Renting was cheaper than a mortgage payment in 35 of the 50 largest metros, one per state. The widest gap in favor of renting was Los Angeles (California) at $1,777 a month; buying won most clearly in Charleston (West Virginia), where the payment was $473 below rent. Both comparisons leave out property tax, insurance and maintenance.

Every housing figure is Zillow Research's published number for December 2025: the home value index (typical value of homes in the middle third of a market, not a median sale price), the rent index for each state's largest metro, the mortgage payment and income-needed series, and the inventory, price-cut and days-to-pending metrics. Sale and list prices are the latest available at the time, which can lag a month. Median household income is from the Census Bureau's American Community Survey and does not change month to month. The current 50-state table, map and a page for every state are on the housing hub.