What Is a Median Home Price?

How is the median home price used?

Here are some ways the median home price metric is used by different people and industries:

• For prospective homebuyers, it provides an overview of typical price ranges in a given area, helping them gauge affordability — especially if they are moving to a completely new state.
• Home sellers can use it as a general benchmark for pricing, though they typically rely more heavily on sales data from recently sold homes.
• Lenders may use median home prices to help them determine how market trends might influence their lending decisions.
• Government agencies and policymakers use this metric to assess housing affordability, guide urban planning, and shape local housing policies.

While real estate agents may consider the median home price when listing a home, their go-to valuation tool is a comparative market analysis (CMA). This is a detailed report they create from recent sales of nearby comparable homes, known as “comps.” The median price may provide helpful insights, but a CMA will give you a far more accurate picture of your home’s market value.

Many real estate agents provide a free CMA when you book a consultation.

How has the median home price changed over time?

Like most other price tags, the median home price in the United States has been on an upward trek over the decades. In the early 1960s, the median sales price of houses was approximately $18,000. Fast-forward to the fourth quarter of 2024, and this figure has risen to $419,200. There have been a few rollercoaster years in between caused by economic, social, or political factors.

Below are some notable seasons of change we’ve seen in median home prices:

• 1970s inflation: High inflation rates led to increased home prices as construction costs soared.
• Early 1980s recession: Economic downturn and high interest rates caused a slowdown in the housing market, stabilizing or reducing median prices.
• Early 2000s housing boom: Easy access to credit, low interest rates, and speculative investments led to a rapid increase in home prices.
• 2008 financial crisis: The housing bubble burst, leading to a significant decline in home values nationwide.
• 2020s pandemic impact: A combination of low interest rates, remote work trends, and supply chain disruptions led to a sharp rise in home prices.

What makes the median home price go up or down?

Several factors influence fluctuations in the median home price:

• Supply and demand: When there’s a shortage of available homes and a lot of buyer interest, prices typically go up. On the other side of the market teetertotter,  oversupply with low demand pushes prices down.
• Economic conditions: When the economy is healthy (low unemployment and rising incomes), this can home-buying power, which leads toi higher prices. Conversely, a weak economy usually reduces demand and lowers prices.
• Interest rates: Lower mortgage rates make borrowing for a home more affordable, which obviously increases buyer demand — along with prices. Higher interest rates tend to slow everything down, which is what we’re seeing in the current nationwide housing market.
• Inflation: As the cost of goods goes up, so do construction costs and home prices. This is a pattern many are all too familiar with.
• Location: Desirable cities with coveted amenities, good school districts, and low crime rates often see higher median prices.
• Government policies: Tax incentives, zoning laws, and housing subsidies often impact housing supply and demand, which in turn influences prices.

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Median sale price vs. average sale price

As noted above, the median sale price and average sale price are two different ways to measure home values. They are often confused — they are not interchangeable. Here is the difference:

• Median sale price: When all homes sold in a given period or area are arranged from lowest to highest, this is the middle price. The way it’s calculated eliminates the influence of extreme high or low numbers that can distort the overall picture.
• Average sale price: This is the sum of all home sale prices divided by the number of sales. While useful in some cases, the average price can be skewed by a few very high-priced or very low-priced homes.

For example, if 10 homes sell in a neighborhood, with prices ranging from $200,000 to $1 million, the average might be artificially high due to a few luxury sales. However, the median would provide a clearer picture of what most buyers are actually paying.

In most cases, the median sale price is a more reliable market indicator.

Get a free home value estimate

While the median home price can provide a general idea of what homes are selling for in your area, it doesn’t tell you what your home is worth. To get a preliminary estimate, you can use HomeLight’s Home Value Estimator.

This free tool analyzes recent sales of comparable homes, market conditions, and other factors to provide a near-instant online home value estimate. It’s a great starting point for sellers who are curious about their home’s potential price before listing it.

How can you estimate your home sale proceeds?

Estimating your home sale proceeds can help you when planning your next move. Your proceeds are what you’ll have left after accounting for closing costs and other expenses like agent commissions. You’ll also need to factor in your remaining mortgage balance when calculating your proceeds.

To get a rough estimate, try HomeLight’s Net Proceeds Calculator. This free tool breaks down the numbers and gives you a ballpark picture of your sale’s profit potential.

Hire a top agent for the highest proceeds

If you’re looking to sell your home and want the highest possible proceeds, work with a performance-proven real estate agent in your market. A seasoned local agent can help you accurately price your home, market it to the strongest buyers, and negotiate the best possible sale price.

Ready to get started? Use HomeLight’s free Agent Match platform to connect with a top-rated agent in your area who can help you navigate every step of the selling process — from preparations to close.

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