Home Prices in 1998 vs 2025
Home prices have obviously risen over the last 25+ years. Does this indicate that real estate is a good investment? Let’s take a look at the average price of a home back in 1998 vs 2025.
Average U.S. Home Price in 1998
Two reliable sources provide insight into home prices back in 1998:
The U.S. Census Bureau and HUD report that in 1998 the average price of new homes sold in the U.S. was $181,300, and the median price of existing homes was $130,600 (with an average of $162,900).
Another historical data source reports that the average (nominal) home price in 1998 was approximately $181,500.
So, to summarize:
Average (new homes): ~$181,300
Average (general, nominal): ~$181,500
Average U.S. Home Price in 2025
For 2025, a few recent sources give estimates of current home costs:
Zillow Home Value Index reports the average U.S. home value as $368,581 as of July 31, 2025.
A Kiplinger report cites a national average home price of $532,390 as of May 2025.
The Harvard Joint Center for Housing Studies notes that by mid-2025, the median price of existing single-family homes had risen to $441,738.
These numbers differ because they refer to slightly different measures (e.g., median vs. mean, including new vs. existing homes, Zillow’s valuation index vs. C2ER’s). Here’s a quick breakdown:
Source / Measure
Value (2025)
Zillow average home value (ZHVI): $368,581
C2ER national average home price (Kiplinger): $532,390
Harvard median price for existing homes: $441,738
Comparing 1998 vs. 2025
Taking the average price for new homes in 1998 ($181,300) and comparing to various 2025 estimates gives:
Zillow average (~$368,600) → ~×2.0
Harvard median existing home (~$441,700) → ~×2.4
C2ER average (~$532,400) → ~×2.9
Summary Answer
In 1998, the average home price was approximately $181,300.
In 2025, depending on the measure:
Around $368,600 (Zillow national average),
Around $441,700 (Harvard median for existing homes),
Or approximately $532,400 (C2ER national average via Kiplinger).
Thus, home prices roughly doubled to nearly tripled between 1998 and 2025.
Adjusting 1998 Price for Inflation (into 2025 Dollars)
We’ll estimate the inflation adjustment using general CPI data:
The CPI-U index in 1998 was approximately 161.6, and in 2025 it’s about 323.048.
Inflation multiplier = 323.048 / 161.6 ≈ 2.0 (specifically ~2.00).
$181,300 (1998) × 2.00 ≈ $362,600 in 2025 dollars (approximate).
Alternatively, specialized data from Madison Trust shows:
In 1998: average home cost $181,500, which equates to $340,502 in constant (inflation-adjusted) dollars.
These provide a reliable range for inflation adjustment.
What This Means
1998 average new home price, when adjusted for inflation, is approximately $340,000–$360,000 in today’s dollars.
By mid-2025, the actual median price of existing homes is around $441,700—$80,000 to $100,000 higher than the inflation-adjusted 1998 figure.
In short, even after considering inflation, home prices have increased significantly more than inflation alone would suggest.
Are you ready to invest in real estate? Let’s chat today and get you started on building your real estate portfolio.
Rafael Amador, Realtor