Inflation causes the price of nearly all goods to increase over time. Home prices are no exception, but over the last decade, they’ve risen exponentially fast. In some markets, home prices have more than doubled since 2015, far outpacing the rate of inflation.
While prices in some markets are now correcting from pandemic highs, they are still far above what the average buyer can afford. This raises an important question: if home prices had only risen in line with inflation since 2015, what would a home cost in 2025?
Zoocasa compared median single-family home prices in 50 of the largest metropolitan areas by adjusting 2015 prices for inflation to estimate what they should cost in 2025—then compared those figures to actual 2025 prices to see how far they’ve really climbed.
The Most Overinflated Home Prices in 2025
Home price growth is largely dependent on local supply and demand, which is why it doesn’t tend to keep pace with inflation. However, the rapid price growth seen during the pandemic pushed home values up even further than traditional price appreciation expectations.
In the first quarter of 2020, before the pandemic buying craze really kicked off, the national median home price rose 7.7% year-over-year according to the National Association of Realtors (NAR). By Q1 2021, price growth had more than doubled to 16.2%, and it remained elevated at 15.7% in Q1 2022.
This trend was observed across the country, but particularly in the Sun Belt, where many home buyers headed to avoid overcrowded cities. As a result, median home prices in Tampa, Miami, Orlando, Phoenix, and Las Vegas all increased by over 130% from 2015 to 2025.
This puts Miami’s 2025 home price $278,000 higher than it would be if it had only kept pace with inflation. In fact, the gap is so wide that Miami ranks among the top five cities with the largest dollar difference between actual and inflation-adjusted home prices.
The five cities to have the largest dollar difference are:
- San Jose, CA: $796,657
- San Diego, CA: $342,865
- San Francisco, CA: $302,858
- Seattle, WA: $293,894
- Miami, FL: $278,121
With 74% of analyzed cities having a difference of more than $100,000 between their actual 2025 cost and their inflation-adjusted cost, it’s clear that home buyer budgets are being stretched further than ever.
Affordable No More: How Budget-Friendly Cities Are Catching Up
Michigan’s second-largest city, Grand Rapids, has become an unexpected hotspot for home price growth. Home buyers may have been drawn to Grand Rapids for its relative affordability, but at a 2025 median price of $321,400, the city isn’t as budget-friendly as it once was.
Since 2015, Grand Rapids’ median home price has spiked by 134.6%—the sixth highest percentage increase among all 50 cities analyzed. Had prices followed inflation alone, a home in Grand Rapids would cost only $186,220 today.
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Indianapolis is another city that’s seen unprecedented growth. In 2015, the median single-family home price was just $139,200. If prices had simply kept up with inflation, that figure would be $189,210 today. Instead, home values have surged by 127.2% to a median of $316,200.
Other midwestern cities once known for affordability are showing the same trend. Kansas City, Milwaukee, and Columbus all had median home prices under $200,000 in 2015. Today, each has surpassed $300,000 — with actual prices sitting at least $100,000 higher than where they’d be if they had only tracked with inflation.
The Cities Closest to Inflation-Adjusted Home Prices
Not one of the 50 analyzed cities has a current median single-family home price within $45,000 of its inflation-adjusted price. This highlights a significant need for increased housing construction, particularly of affordably built units, policy adjustments, and other measures, in order to make housing more accessible.
If you want to avoid overpriced housing markets, there are only a few to pick from. The median single-family home price increased by less than 100% in just 23 cities, with San Antonio experiencing the smallest increase by 62.4%. This puts San Antonio’s median home price just $48,943 higher than what it would be if it had only kept pace with inflation.
The five cities where current home prices are closest to their inflation-adjusted values are:
- San Antonio, TX
- Houston, TX
- Tulsa, OK
- Cleveland, OH
- Rochester, NY
However, as these markets have comparatively more affordable prices, even a $48,000 increase can feel significant. Take Cleveland, for example. Its median home price of $213,200 is one of the most affordable in the country. But for a home buyer earning the median household income in Cleveland — $67,586 — a 101.3% increase in the median single-family home price represents a significant portion of their annual earnings. And if incomes haven’t risen at a similar pace over the past decade, that buyer is likely at an even greater disadvantage.
When Paychecks Can’t Catch Up to Property Prices
If incomes keep pace with inflation, then the rising price of goods and services is manageable. The problem, however, is that many wages have not risen enough with inflation, making these home price surges feel even more drastic.
Zoocasa analyzed the median annual wages of 25 key occupations and found that only 13 kept up with inflation. However, since these figures reflect national medians, local wage differences may mean even fewer workers have actually seen their earnings rise enough to match the growing cost of living.
Notably, many of the lowest-earning jobs have seen wage growth that outpaced inflation, while some of the highest-paying roles have stagnated. Still, despite that growth, many low-wage workers remain far from affording a home.
For example, construction laborers have seen a 50.3% increase in median annual wages since 2014, yet their annual salary of $46,730 is roughly equivalent to just 10% of the national median home price of $402,300.
On the other hand, high-wage workers may seem well-positioned to afford a home. But with 10-year wage growth of just 13.7% for pharmacists, 15.9% for dentists, and 19.5% for engineers, even those in high-paying roles are feeling the squeeze. Slower income growth makes it harder to save for a down payment or keep up with the rising cost of living.
Where Do Home Prices Go From Here?
Will the next ten years of home price growth follow the last ten years? It’s difficult to say for certain, as home price fluctuations can be very unpredictable. But barring any major disruptions, price growth appears to be settling into a more stable and sustainable pace.
In the first quarter of 2025, the national median home price rose by just 3.4% from the year before. Many of the country’s most expensive markets posted even smaller year-over-year gains, like San Francisco (1.5%), Seattle (2.3%), and Miami (3.0%).
These more moderate gains offer homeowners steady opportunities to build equity, while giving buyers a better chance to keep pace with appreciation. After years of rapid increases, this slower growth signals a market that’s starting to find more balance and with it, a bit more breathing room for everyone.
Thinking of buying or selling in one of these markets? Start browsing homes today on Zoocasa.
