The American Enterprise Institute’s Housing Center released its monthly update to the AEI Housing Market Indicators on September 30, 2025.
Video Recording
<span data-mce-type=”bookmark” style=”display: inline-block; width: 0px; overflow: hidden; line-height: 0;” class=”mce_SELRES_start”></span>
Key Takeaways
Recent movements in rates and demand.
The median purchase rate remained at 6.125% in week 39, 2025.
In August 2025, preliminary constant-quality home prices were up 1.6% from a year ago. Based on our projection using ICE data, YoY HPA will be around 1.0% and 0.5% in September and October 2025, respectively.
Home price appreciation (HPA) and month’s supply trends through August 2025.
August 2025’s preliminary YoY HPA was 1.6%, the lowest August level of the series.
50 of 57 top metros by home sales experienced a seller’s market (months’ supply < 7 mo.) of varying intensities in August 2025.
YoY HPA spread for Aug. 2025 among 60 largest metros remains wide, with a clear demarcation between North & South.
The Classic FICO vs VantageScore debate: what do the numbers say?
Our analysis found that much of the reported advantage comes from methodological inconsistencies and selection bias. Once corrected, the purported performance advantage of VS4 largely disappears.
The real risk for the housing finance system isn’t Classic FICO— it’s the premature and fraught adoption of a two-score system.
Our assessment of the bipartisan ROAD Act.
Beneath its bipartisan veneer, the ROAD Act runs counter to Republican priorities of local control, market-based solutions, and fiscal discipline.
Republicans should instead pursue a two-tiered strategy rooted in markets and local control: issue an executive order selling 0.05% of public land.
Family In My Back Yard (FIMBY) starter homes are essential for family formation.
The American Dream is at risk for working families: We have not built enough housing, especially family homes, to keep pace with demand.
FIMBY could solve the U.S. supply shortage with single-family solutions alone: simply allowing denser single-family 1-4 infill housing and smaller lots in new residential subdivisions would add 900,000 homes per year.
A comparison of various metrics to predict loan originations.
In recent years, the MBA purchase app data have diverged from other data sources.
So far, MBS data have followed rate lock data, and time will tell which one is the better leading indicator.
Housing market volatility: how many metros are seeing price declines?
Adjusted for inflation, 41 (72%) of the 57 largest metros in the U.S. saw real YoY price decreases in August, including every major metro in the three largest states: California, Texas, and Florida.
This trend is especially evident in the South and West, where 33 (85%) of the 39 major metros had HPAs below the national average.
When will today’s outstanding ARMs reset? Answer: not for a while.
According to ICE data, ARMs make up ~3.9% (570K) of 14.6M purchase loans since 2019.
Just 22,000 of these loans reset in 2025, rising to 40,000+ annually from 2026 through 2032.
If you would like to receive invitations to our monthly update calls, please subscribe here. For data on mortgage risk, please use our Mortgage Risk Index Interactive.