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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 22 July 2025 C O V E R S T O R Y states, their prices have held up better, even with this slowing in demand over the past couple of months. Fleming: There is significant varia- tion in house price appreciation across markets driven by differences in the local supply and demand dynamics. In March, house prices declined in 13 of our top 50 metro markets, compared with a year ago. Notably, six of those 13 markets are in Texas or Florida—two regions that saw rapid pandemic-era expansion. Prices declined the most in Tampa, Florida, in March, falling by nearly 5 % year over year, with the decline driven by a combination of persistent high mortgage rates, cooling demand, and rising inventory. At the other end of the spectrum, Cincinnati led the country with over 9% annual price growth. Tight inventory in a relatively affordable market continues to support strong price gains in this market. These two examples highlight a diverging housing landscape, where market fundamentals are pulling prices in different directions across regions. Our First American Data & An- alytics House Price Index segments home price changes into three price tiers based on local market sales data: a starter tier, which represents home sales prices at the bottom third of the market price distribution; a mid-tier, which rep- resents home sales prices in the middle third of the market price distribution; and the luxury tier, which represents home sales prices in the top third of the market price distribution. According to our April report, the starter home price tier is the stron- gest, driven by first-time homebuyer demand relative to a shortage of existing homeowners selling. Markets with the strongest growth in the starter home price tier are predominantly located in the Northeast or Midwest, including Pittsburgh, Baltimore, and St. Louis— markets that are attractive to potential first-time homebuyers due to their relative affordability. Navigating the Fault Lines As the mortgage industry enters the second half of 2025, the market's underlying "fault lines" remain a defin- ing feature. While national economic growth continues at a subdued pace and policy uncertainty lingers, the housing sector is increasingly shaped by regional disparities, evolving regulatory frame- works, and affordability challenges. The expert insights shared here underscore that, despite near-term headwinds, the sector's long-term fundamentals remain resilient. According to our April report, the starter home price tier is the strongest, driven by first-time homebuyer demand relative to a shortage of existing homeowners selling. " —Mark Fleming, Chief Economist, First American Financial Corp.