Last year, the Boone County housing market recorded its first annual sales increase since 2021. As 2025 approached, following a presidential election, many hoped for lower prices on consumer goods and mortgage rates, which have yet to materialize.  

In the first quarter of 2025, the local housing market was divided into two segments: homes priced below $400,000 and those priced above. Buyers and sellers continue to react to fluctuating economic data and mortgage rates.  

From January through February of this year, home sales surged by 16 percent, driven by falling mortgage rates from mid-November to early December. This encouraged buyers to put homes under contract to benefit from the lower rates. However, by late February, mortgage rates for a 30-year fixed-rate mortgage (FRM) quickly rose above 7 percent, limiting the sales increase in the first quarter to just 6 percent. When sales are broken down by price range, there is a clear divide: Homes priced under $400,000 saw a sales increase of 12 percent, while homes above $400,000 experienced a sales decline of 7 percent.  

Before this year, the local housing market faced lower sales, even as prices rose significantly. In the first quarter of this year, prices have slightly decreased but vary by price range category. The median price fell by .66 percent to $324,999 for the overall market. Homes priced under $400,000 posted a median price increase of 1.6 percent, whereas homes priced above $400,000 only saw a price increase of 0.7 percent.  

Homes also remain on the market longer before going under contract, returning to pre-COVID levels. In March, the average cumulative days a home spent on the market reached 79 days, an increase of 31 percent from last year. The time it takes to go under contract varies significantly based on price. Homes priced under $400,000 averaged 67 days on the market, while homes above $400,000 were on the market for an average of 104 days.  

Condo sales in Boone County continue to struggle, accounting for 6 percent of the local residential market. The primary reason for this sluggishness is a lack of favorable financing options. Currently, not a single condo development in Boone County qualifies for Federal Housing Administration (FHA) loans, restricting many buyers, particularly first-time buyers, from benefiting from FHA advantages such as lower rates and a 3.5 percent down payment.   

Inventory on the market continues to increase, providing buyers with more options when searching for a new home.   

By the end of March, market inventory was up 30 percent from last year, with the months’ supply figure reaching 2.66. While this is a significant increase, a preferable inventory level at the end of March heading into the spring and summer selling season is 4 to 5 months. Market inventory also varies by price range: homes priced below $500,000 averaged 2 months of inventory, indicating a strong seller’s market, while homes priced above $500,000 averaged 6.15 months of inventory, providing a slight advantage to buyers in the higher-priced segments.  

Overall, the results for the first quarter of the home market were positive, but there are potential challenges ahead. Sales are increasing, and prices are stabilizing compared to the substantial appreciation seen over the past four years. The outcome for the remainder of 2025 will rely on consumer confidence, the impact of tariffs, and mortgage rate levels. If the 30-year FRM remains above 7 percent, sales may decline, potentially impacting prices at the upper end of the market. Conversely, if mortgage rates drop to 6.5 percent or lower and consumer confidence improves, sales and prices are likely to increase at higher percentages than in the first quarter. 

Brian Toohey is the chief executive officer for the Columbia Board of REALTORS.