These US housing markets are leading the nation in price growth, exclusive Homes.com data shows

It might be ice cold in the Midwest this winter — but home prices are red hot.

In December, just eight of the 40 largest markets saw annual price appreciation exceed 4%. Five of those markets were in the Midwest, according to exclusive data Homes.com released Wednesday. At the top of that list: St. Louis with a 7.7% increase in median home prices compared to a year earlier.

Other notable Midwestern markets with price growth greater than 4% in December include Pittsburgh, Cincinnati, Detroit and Chicago.

It's a stark contrast with coastal and Sun Belt markets — some of which saw stagnant or even declining median home prices.

Take Texas, for example. Compared to a year earlier, prices in Houston were unchanged in December. Meanwhile, San Antonio, Austin and Dallas-Fort Worth all saw lower prices when 2025 came to a close than at the end of 2024.

There were, however, a few outliers. Three coastal markets — Philadelphia, San Francisco and Washington, D.C. — reported surges in home prices in the year ended in December. In each of those cases, though, the December growth followed months of weak or negative price appreciation.

The geographical imbalance is more of an overdue normalization than a deeper-rooted change, according to Brad Case, chief residential economist at Homes.com.

"Several markets on the coasts and in the Sun Belt had seen such a surge in demand during the COVID-19 shutdown that prices shot upward, but that generally hadn't happened in the Midwestern markets. In the Sun Belt markets, the surge in demand was followed by a surge in supply, but that, too, generally didn't happen in the Midwest," he said in an email.

"The process of normalization was always going to involve a rebalancing between the Midwest and those areas that had been most affected by the pandemic," Case added.

Indeed, in Detroit, real estate agent Jim Shaffer said a back-and-forth in inventory has driven recent price changes as the market seeks a middle ground.

"There was a bit of a glut of inventory this fall, but this winter, that inventory has been taken — either removed from the market or sold from the market — because obviously during the holidays, less people list," he told Homes.com. "Right now, we're back to low inventory, multiple offers on some of our listings again."

More generally in the Midwest, Shaffer noted, lower median prices compared to the rest of the country means buyers "can still get a nice home" in the region.

"We're having the affordability boom that many other places outside the Midwest had experienced for years or decades, but I think our market has sustained in the Midwest because of our low average price points," he added.

On a national scale, home prices grew just 1.1% in December compared to a year earlier, ending a period defined by moderate but persistent home price appreciation.

At year's end, the median national home price was $380,000, up from December 2024's median of $376,025.

Even as prices grew, though, housing affordability improved because wages increased and mortgage rates eased, Case said, noting that average weekly earnings grew more than three times as fast as home prices in 2025.

"There are two fundamental ways for affordability to improve: one is for house prices to decline, and the other is for incomes to increase. What happened in 2025 was that incomes increased substantially while home prices increased only moderately," he said. "That's exactly what our country generally hopes for."

That said, Case said he foresees a continued normalization in home prices this spring.

"The homes market had been out of whack since the COVID-19 pandemic shutdown, with unprecedented price increases, so the process of getting back to a normal market was always going to involve a slowdown in price appreciation," he said. "We've seen that normalization process play out over the last few months of 2025, so I expect the spring of 2026 to look much more like 2018-2019, which was the most recent period of normalcy in the homes market."

Homes.com reporter Caroline Broderick contributed to this article.