Starter-Home Sales Rose 4% in June, a Bright Spot in a Sluggish Housing Market

Yahoo

29-07-2025

San Diego recorded an 18% spike in starter-home sales, leading all major metros. Fort Lauderdale, FL recorded the biggest drop (-17%).
SEATTLE, July 29, 2025--(BUSINESS WIRE)--Sales of starter homes rose 3.9% year over year in June to the highest level in two years, a bright spot in an otherwise sluggish housing market where sales fell across other price tiers. That's according to a new report from Redfin, the real estate brokerage powered by Rocket.
June was the 10th consecutive month in which home sales rose year over year, indicating that first-time homebuyers are jumping into the market.
Redfin Home Tiers
Home Price Percentile
Median Sale Price
Median Sale Price YoY
Homes Sold YoY
Pending Sales YoY
Active Listings YoY
Starter
5%-35%
$260,000
3.1%
3.9%
3.1%
19.0%
Mid
35%-65%
$370,784
2.1%
-0.9%
-0.7%
15.1%
High
65%-95%
$577,117
2.7%
-3.6%
-2.7%
13.2%
Luxury
Top 5%
$1.29M
4.0%
-6.7%
-5.0%
9.1%
In comparison, sales of mid-priced homes (35th-65th percentile of the market by sale price) fell 0.9% year over year in July, while high-price homes (65th-95th percentile) fell even more, down 3.6%.
Pending sales of starter homes are also rising, up 3.1% year over year in June, a sign that closed sales are likely to continue increasing in the coming months.
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In comparison, pending sales of mid- and high-price homes fell 0.7% and 2.7% year over year in June, respectively.
"In a market where it's difficult for most Americans to afford a dream home, many are turning toward starter homes," said Redfin Senior Economist Sheharyar Bokhari. "They're typically smaller and more modest, but starter homes remain within reach for some buyers who have been priced out of higher tiers. First-time buyers are especially apt to go for starter homes, as they don't have equity from a previous home sale to help with their payments.
Even starter homes are too expensive for a large number of Americans, who are often forced to rent or live with family—especially in metros like San Francisco where the median price of a starter home is nearly $1 million. U.S. homebuyers need to earn $112,131 per year to afford the median priced home for sale, while the typical U.S. household earns an estimated $86,258.
"With prices rising and mortgage rates elevated, some first-time buyers may be pushed out of the market by move-up buyers who aren't able to afford the next tier themselves," said Bokhari.
Starter home prices hit record as inventory rises to pre-pandemic levels
The typical U.S. starter home sold for a record $260,000 in June, up 3.1% year over year.
In comparison, prices of mid-price homes rose 2.1% to $370,784 from a year earlier, while high-price homes rose 2.7% to $577,177. Both were just shy of price records set in previous months.
While prices of starter homes remain at a record high, price growth has been slowing for six consecutive months. June's 3.1% pace was the slowest in a year.
A big reason for slowing price growth in the starter-home segment—and another reason why sales are rising—is soaring inventory, with the number of active listings rising 19% year over year to the highest level for June since 2017. That was the fastest growth among the price tiers.
Listings of middle-priced listings rose 15.1% year over year, while upper-priced homes grew 13.2%.
More starter homes for sale is good news for first-time homebuyers, according to Redfin agents.
"First-time buyers definitely have more opportunities now. Not only are there more lower-priced homes available, but there's less demand. The buyers who are out there are no longer in competition with 10 other offers, or all-cash buyers," said Kathy Scott, a Redfin Premier agent in Phoenix, where active listings of starter homes are up more than 40% from a year ago. "With so many starter homes on the market, buyers have an opportunity to take their time looking for houses that fit their needs. Some are waiting for prices to go down—and they might—but if your plan is to stay in the home for five to 10 years, you will build equity in your home."
Metro-Level Starter Home Highlights: June 2025
Redfin's metro-level starter home data includes the 50 most populous U.S. metros. Some metros are removed from time to time, to ensure data accuracy. All changes noted below are year-over-year changes.
Prices: The median sale price of starter homes rose most in Milwaukee (15.3% to $212,918), Detroit (13.6% to $93,140) and Newark, NJ (11.6% to $394,487). The largest falls were in San Antonio (-5.5% to $218,631), Austin, TX (-3.8% to $326,440) and Dallas (-1.2% to $297,079).
Sales: Starter home sales increased most in San Diego (18%), Providence, RI (17.4%) and Sacramento (14.3%). They decreased most in Fort Lauderdale, FL (-17.5%), Miami (-17.4%) and San Antonio (-9.6%).
Active listings: The total number of starter homes for sale increased most in Las Vegas (53.6%), San Diego (44.1%) and Phoenix (43.1%). Only one metro—San Antonio—saw a fall in active listings (-2.2%).
New listings: New listings of starter homes increased most in St. Louis (23.6%), Las Vegas (19.5%) and Newark (16.4%). New listings fell most in San Antonio (-13.8%), San Jose, CA (-13.4%) and Tampa, FL (-10.9%).
Speed of sales: Starter homes sold fastest in Seattle with a median of nine days, followed by Montgomery County, PA (15 days) and Indianapolis (17 days). They sold slowest in Fort Lauderdale, FL (99 days), West Palm Beach, FL (91 days) and Miami (83 days).
To view the full report, including charts and full metro-level data, please visit: https://www.redfin.com/news/starter-homes-june-2025
About Redfin
Redfin is a technology-driven real estate company with the country's most-visited real estate brokerage website. As part of Rocket Companies (NYSE: RKT), Redfin is creating an integrated homeownership platform from search to close to make the dream of homeownership more affordable and accessible for everyone. Redfin's clients can see homes first with on-demand tours, easily apply for a home loan with Rocket Mortgage, and save thousands in fees while working with a top local agent.
You can find more information about Redfin and get the latest housing market data and research at Redfin.com/news. For more information about Rocket Companies, visit RocketCompanies.com.
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Contacts
Contact Redfin Redfin Journalist Services: Kenneth [e-mail]