Redfin Reports Home Prices Are Rising Fast in the Midwest

Rhea-AI Summary

Redfin (NASDAQ: RDFN) reports significant regional variations in the U.S. housing market for February 2025. The Midwest leads price growth, with Milwaukee seeing a record 20% year-over-year increase to $330,000, followed by Detroit (12.5%) and Cleveland (10%). Nationwide home prices rose 3.2% to $425,421, marking the slowest growth in six months.

Despite falling homebuyer demand, with pending sales dropping 6.2% year-over-year, prices continue rising due to inventory constraints. While national active listings increased 10.7% year-over-year, Midwest markets face declining inventory. The average time for homes on the market reached 54 days nationwide, the longest for any February since 2020.

Contrasting the Midwest, Texas and Florida markets show price declines, with Austin experiencing the largest drop (-2.7%), followed by Tampa (-1.9%). These regions face surging housing supply due to increased construction and challenges like rising insurance costs.

Positive

• Record price growth in Midwest markets with Milwaukee up 20% YoY
• National home prices increased 3.2% to $425,421
• National active listings rose 10.7% YoY, reaching highest level since June 2020
• Mortgage rates decreased to 6.65% in March from 6.84% in February

Negative

• Pending home sales declined 6.2% YoY, largest drop since September 2023
• Homes taking longest time to sell since 2020 at 54 days on market
• Price declines in major Texas and Florida markets
• Significant inventory shortages in Midwest markets

Insights

Financial Analyst

Redfin's latest market report reveals significant regional divergence in the U.S. housing market that presents both opportunities and challenges for the brokerage. The data highlights a 3.2% nationwide price increase to $425,421 despite a substantial 6.2% year-over-year drop in pending sales - the largest decline since September 2023.

The Midwest market emerges as a particular bright spot, with Milwaukee (20%), Detroit (12.5%), and Cleveland (10%) showing remarkable price appreciation amid inventory. This contrasts sharply with price declines in Texas and Florida markets, where Austin saw prices drop 2.7% year-over-year.

Most concerning for Redfin's transaction volume is the nationwide slowdown in sales pace. Homes now typically spend 54 days on market - the longest February sales timeline since 2020 and 6 days longer than last year. This extended sales cycle potentially impacts Redfin's transaction throughput and revenue generation efficiency.

The bifurcated market dynamics suggest Redfin may need to allocate resources strategically toward high-performing Midwest markets while carefully managing expenses in slower Southern markets. The 10.7% year-over-year increase in nationwide active listings indicates improved inventory conditions broadly, but the regional variations require a nuanced operational approach from real estate brokerages like Redfin.

Real Estate Market Strategist

The dramatic regional divergence in housing market performance creates a complex operating environment for Redfin. The Midwest strength, exemplified by Milwaukee's 20% price surge and inventory declines, represents a classic supply-constrained seller's market where Redfin's technology-enabled approach can drive efficiency in transactions.

However, the broader national picture shows concerning trends in buyer demand with the 6.2% year-over-year decline in pending sales indicating potential transaction volume challenges. The market's asymmetry is particularly striking - while some Midwest homes generate bidding wars with $50,000 above-asking offers, the typical U.S. home now sits on market for 54 days, compared to just 10 days in San Jose.

Texas and Florida markets present particular challenges with their substantially longer marketing times (91-94 days) and price declines. These states have been pivotal growth markets, but now face inventory oversupply issues that fundamentally shift negotiating leverage to buyers.

For Redfin's business model, this market fragmentation demands sophisticated resource allocation. The brokerage must balance capitalizing on high-velocity, high-appreciation markets in the Midwest while developing strategies to navigate oversupplied southern markets where homes may require more marketing investment and yield lower commissions due to price pressure. This regional adaptation challenge is heightened by persistent mortgage rates around 6.65% continuing to constrain affordability.

Home prices in Milwaukee jumped 20% year over year in February, a bigger increase than any other major U.S. metro. Nationwide, prices rose 3%, and pending sales fell the most since 2023.

SEATTLE--(BUSINESS WIRE)-- (NASDAQ: RDFN) — The Midwest is home to three of the five metro areas where home prices are rising fastest, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage.

In Milwaukee, the median home sale price rose a record 20% year over year in February to $330,000—the biggest jump among the 50 most populous metros. Next came Detroit (12.5%), Nassau County, NY (11.7%), San Jose, CA (11.1%) and Cleveland (10%).

Nationwide, the median home sale price climbed 3.2% to $425,421—the slowest growth in six months. That coincided with a slowdown in homebuyer demand; U.S. pending home sales fell 6.2% year over year—the biggest decline since September 2023—and fell 1.1% month over month on a seasonally-adjusted basis.

Prices are rising even though homebuying demand is falling because in much of the country, there aren’t enough homes for sale, which is prompting buyers to bid up prices. While inventory is increasing in many areas, a lot of Midwest markets continue to see declines in the number of homes for sale; three of the five metros where housing supply is falling fastest are in the Midwest.

In Detroit, active listings dropped 6.7% year over year in February—the largest decline among the top 50 metros. Next came Newark, NJ (-6.4%), Milwaukee (-3.7%), Cleveland (-3.6%) and Portland, OR (-3.1%).

Nationwide, active listings rose 10.7% year over year and 1.3% month over month on a seasonally-adjusted basis, hitting the highest level since the early days of the pandemic (June 2020). Please note that metro-level data is not seasonally adjusted.

“Today’s housing market is weird. Some homes are attracting bidding wars like it’s 2020 again, while others are sitting on the market for weeks with no action,” said Desiree Bourgeois, a Redfin Premier real estate agent in Detroit. “I recently saw one house get 10 offers and sell for $50,000 over the asking price, and the buyer waived their appraisal contingency. Oftentimes, it’s move-in ready homes in desirable areas that draw competition.”

Even though prices are rising in the Midwest, it remains the most affordable homebuying region in the country. Detroit has the lowest median sale price of any major metro, at $180,000. Cleveland is the second most affordable, at $217,750.

February 2025 Housing Market Highlights: United States

	February 2025	Month-over-month change	Year-over-year change
Median sale price	$425,421	1.8%	3.2%
Existing home sales, seasonally adjusted annual rate	4,200,053	-1.4%	0.1%
Pending home sales, seasonally adjusted	462,931	-1.1%	-6.2%
Homes sold, seasonally adjusted	425,074	-0.7%	-2.0%
New listings, seasonally adjusted	533,631	-6.3%	-4.7%
Total homes for sale, seasonally adjusted (active listings)	1,831,602	1.3%	10.7%
Months of supply	3.5	-0.3	0.5
Median days on market	54	-2	6
Share of homes that went off market in two weeks	36.1%	6.5 ppts	-3.7 ppts
Share of homes sold above final list price	24.6%	2.1 ppts	-1.5 ppts
Average sale-to-final-list-price ratio	98.5%	0.3 ppts	-0.2 ppts
Pending sales that fell out of contract, as % of overall pending sales	13.9%	0.3 ppts	0.5 ppts
Monthly average 30-year fixed mortgage rate	6.84%	-0.12 ppts	0.06 ppts

Prices Are Falling Fastest in Texas and Florida

Prices fell in six major U.S. metros in February, and all but one of those metros are in Texas or Florida.

In Austin, TX, the median home sale price dropped 2.7% year over year to $430,000—the largest decline among the 50 most populous metros. Next came Tampa, FL (-1.9%), San Antonio (-1.7%), Houston (-1.5%), Atlanta (-1%) and Jacksonville, FL (-0.8%).

In many ways, Texas and Florida are the opposite of the Midwest when it comes to the housing market. The supply of homes for sale is surging in many parts of Texas and Florida, giving buyers the upper hand and causing prices to fall. That’s partly because they’ve been building more homes than other states. And in Florida, unsold inventory is piling up amid skyrocketing insurance costs and HOA fees, along with intensifying natural disasters.

“There are about five times more home sellers than buyers, meaning it’s a buyer’s market,” said Connie Durnal, a Redfin Premier agent in the northern suburbs of Dallas. “That’s why I’m telling all of my sellers that it’s crucial to price their homes competitively.”

Nationwide, Homes Are Selling at the Slowest Pace in Five Years

The typical U.S. home that went under contract in February was on the market for 54 days—the longest period for any February since 2020, and up six days from a year earlier.

Homes took the longest to sell in Florida and Texas. In Miami, the typical home that went under contract last month sat on the market for 94 days—more than any other major metro. Next came West Palm Beach, FL (92), Austin (91), Fort Lauderdale, FL (91) and Pittsburgh (85).

Many homebuyers are skittish due to economic uncertainty and elevated mortgage rates, which is why Redfin agents say that if sellers want to find a buyer quickly, they should make sure their home is in good condition and fairly priced. The average 30-year-fixed mortgage rate was 6.84% in February, down slightly from 6.96% a month earlier but still more than double the record low hit during the pandemic. Rates have dipped further in March, now sitting at 6.65%.

Homes sold quickest in West Coast tech hubs. In San Jose, the typical home that went under contract in February was on the market for 10 days—fewer than any other major metro. It was followed by Seattle (12), Oakland, CA (14), San Francisco (15) and Boston (24). Historically, it has been common for homes in West Coast markets to sell the fastest.

Metro-Level Highlights: February 2025

• Prices: Median sale prices rose most from a year earlier in Milwaukee (20%), Detroit (12.5%) and Nassau County (11.7%). They fell most in Austin (-2.7%), Tampa (-1.9%) and San Antonio (-1.7%).
• Pending sales: Pending sales rose most in Los Angeles (6%), Anaheim, CA (5.2%) and Columbus, OH (0.6%). They fell most in Miami (-16.6%), Minneapolis (-16.1%) and Philadelphia (-16.1%).
• Closed home sales: Home sales rose most in Portland, OR (7.4%), Los Angeles (6.2%) and Anaheim (3.6%). They fell most in Miami (-20.7%), Austin (-18.2%) and Fort Lauderdale (-17.6%).
• New listings: New listings rose most in Oakland (24.8%), San Jose (22.9%) and Sacramento, CA (17%). They fell most in Portland, OR (-24.9%), Detroit (-23.3%) and Kansas City, MO (-20.2%).
• Active listings: Active listings rose most in Oakland (37.5%), Denver (29.8%) and Anaheim (26.9%). They fell most in Detroit (-6.7%), Newark (-6.4%) and Milwaukee (-3.7%).
• Sold above list price: In San Jose, 67.6% of homes sold above their final list price, the highest share among the metros Redfin analyzed. Next came Oakland (59.6%) and San Francisco (58.4%). The lowest shares were in West Palm Beach (5.5%), Miami (7.4%) and Fort Lauderdale (9%).

To view the full report, please visit: https://www.redfin.com/news/home-prices-rise-midwest-2025

About Redfin

Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1.8 billion in commissions. We serve approximately 100 markets across the U.S. and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans^®, Rent.™, Apartment Guide^®, Title Forward^® and WalkScore^®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250314690174/en/

Contact Redfin

Redfin Journalist Services:

Angela Cherry

press@redfin.com

Source: Redfin

FAQ

What was the median home sale price increase in Milwaukee for RDFN's February 2025 report?

Milwaukee's median home sale price increased by 20% year-over-year to $330,000, the highest among the 50 most populous metros.

How much did nationwide pending home sales decline in February 2025 according to RDFN?

U.S. pending home sales fell 6.2% year-over-year and 1.1% month-over-month on a seasonally-adjusted basis.

Which cities reported the largest home price decreases in RDFN's February 2025 report?

Austin led with a 2.7% price decline, followed by Tampa (-1.9%) and San Antonio (-1.7%).

What was the average time homes spent on the market according to RDFN's February 2025 data?

The typical U.S. home spent 54 days on the market, up 6 days from the previous year.

Which markets showed the fastest home sales in RDFN's February 2025 report?

San Jose led with homes selling in 10 days, followed by Seattle (12 days) and Oakland (14 days).