St. Louis Home Prices Up 4%: 2025 Market Insights

Written by David Dodge 

According to FOX 2 St. Louis, the St. Louis real estate market continues to navigate a complex landscape, marked by persistent inventory challenges and steady interest rates. If you're wondering whether now is the right time to buy or sell, you're not alone. Real estate broker Sarah Bernard recently joined FOX 2 News to share insights into the latest market trends.

Low Housing Inventory Continues to Challenge Homebuyers

One of the biggest trends over the past 18 months has been a low inventory of available homes. This limited supply makes it more difficult for buyers to find suitable properties, often leading to competitive bidding situations. According to FOX 2 St. Louis and the St. Louis REALTORS® Association, the number of active listings remains significantly below pre-pandemic levels, contributing to a seller’s market where demand exceeds supply.

Buyers searching for homes in St. Louis should be prepared for a fast-moving market. Popular neighborhoods, such as Central West End, Clayton, and Chesterfield, continue to experience high demand. If you’re planning to buy a house, working with an experienced real estate agent and getting pre-approved for a mortgage can increase your chances of securing a property before others.

Mortgage Interest Rates Remain High but Stable

Higher mortgage rates have posed another challenge for homebuyers. Over the past year, interest rates have remained relatively unchanged, hovering around 6.5% for a 30-year fixed mortgage. This has made housing affordability a key concern, particularly for first-time homebuyers.

However, real estate experts predict that mortgage rates may begin to decrease in the latter half of 2025, depending on economic factors such as inflation and Federal Reserve policies. If rates decline, more buyers could enter the market, potentially driving up home prices further. Those considering purchasing a home may want to evaluate whether to buy now or wait for more favorable financing conditions.

Home Prices in St. Louis Are Rising

Despite higher interest rates, home values in the St. Louis metro area have continued to increase. Over the past year, property prices have risen by approximately 4%, reflecting strong demand. According to FOX 2 St. Louis, data from Zillow and Redfin indicate that median home prices in St. Louis currently sit around $275,000.

Certain high-demand areas, such as Kirkwood, Webster Groves, and Lafayette Square, have seen even greater appreciation. Sellers in these locations may find it advantageous to list their properties now, while demand remains strong. Additionally, real estate investors continue to view St. Louis as an attractive market due to its relative affordability compared to other major U.S. cities.

St. Louis Rental Market Trends in 2025

For those not looking to buy a home, the rental market in St. Louis has also experienced notable changes. Rental rates have increased by an average of 6% over the past year, reflecting the broader housing shortage.

Many renters are choosing to remain in their current apartments or rental homes due to high home prices and mortgage rates. This has resulted in lower vacancy rates and more competition among tenants. Landlords are benefiting from this trend, as demand for rental properties continues to rise.

If you are a tenant looking for a new rental home, it is advisable to start your search early, as desirable rental properties are being leased quickly. For landlords and real estate investors, St. Louis remains an attractive market for rental income, particularly in areas close to universities, hospitals, and business hubs.

What This Means for Homebuyers and Sellers

For homebuyers, navigating a low-inventory market means being prepared to act quickly and competitively. Securing mortgage pre-approval, working with an experienced real estate agent, and considering alternative financing options can provide an edge in today’s competitive environment. Some buyers are also exploring creative financing strategies, such as lease options or seller financing, to overcome high interest rates.

For home sellers, the continued appreciation of home values presents a strong opportunity to list properties at favorable prices. However, as more homes enter the market later in the year, competition could increase, making early 2025 an ideal time to sell before supply levels rise.

St. Louis Real Estate Market Forecast for 2025

Looking ahead, experts predict that the St. Louis housing market will remain strong in 2025. Factors such as job growth, population trends, and interest rates will continue to influence housing demand.

If mortgage rates decrease, more buyers may enter the market, driving up home prices even further. However, if economic conditions slow, there could be a stabilization in home prices, offering some relief to buyers. Regardless of these fluctuations, St. Louis remains one of the most affordable major metro areas in the U.S., making it an appealing option for homebuyers and real estate investors alike.

Final Thoughts

The St. Louis real estate market remains a dynamic and evolving space, with both challenges and opportunities for buyers, sellers, and investors. While housing inventory shortages and interest rates continue to impact affordability, the steady rise in home values and rental demand signals a strong market.

According to FOX 2 St. Louis, whether you're looking to buy, sell, or invest, staying informed and working with experienced professionals can help you make the best decisions. As we move further into 2025, adaptability and market awareness will be key to navigating this ever-changing real estate landscape.