Home prices in the regional market continue to outpace national trends, with some local metropolitan areas seeing annual appreciation rates more than triple the U.S. average, according to the latest Federal Housing Finance Agency (FHFA) report.
The 2025 fourth-quarter Housing Price Index report shows a regional average annual appreciation of 4.23%, significantly higher than the national increase of 1.82%. Leading the surge were the Quad Cities and Dubuque, which posted gains of 6.53% and 5.98%, respectively.
Industry experts attribute the localized growth to a combination of high demand and a persistent shortage of inventory, particularly in more affordable price brackets.
“Appreciation varies by location and price range, with more affordable homes often seeing stronger gains due to higher demand and tighter supply, while higher-end properties tend to appreciate at a slower pace,” the report stated.
While the national market saw a modest 0.8% increase in the fourth quarter compared to the third quarter of 2025, regional performance was more varied. The Quad Cities saw a robust 2.94% quarterly jump, while Iowa City and Des Moines experienced slight pullbacks of 1.05% and 0.05%, respectively.
Despite a winter season marked by heavy snow and cold temperatures that slowed early activity, real estate leaders are optimistic about the 2026 outlook. Caroline Ruhl, CEO of Ruhl&Ruhl Realtors, who released the report, said buyer demand has already rebounded.
“Ruhl&Ruhl Realtors have 8% more in pending sales volume through week 12 this year than we had at the same time last year,” Ruhl said. “This bodes well for the continuation of appreciation in home prices going forward.”
The five-year outlook remains strong for the region. Since 2020, home values in all regional Metropolitan Statistical Areas (MSAs) have seen positive gains, ranging from 34.58% in Iowa City to a high of 47.56% in Dubuque. The regional average five-year appreciation stands at 40.41%, slightly trailing the national five-year average of 43.20%.
Data for certain markets, including Iowa City, Dubuque, and Waterloo-Cedar Falls, were calculated using the FHFA’s Home Price Index calculator. These areas did not meet the standard 1,000-transaction threshold for the agency’s published summary table but still showed significant year-over-year growth.
The U.S. housing market has now maintained positive annual appreciation every quarter since the start of 2012.
