How is median home price calculated?

Q: How is median home price calculated?

The median home price is the middle value when all closed sales in a period are ranked by price — half sold above it, half below. NAR calculates it monthly for existing homes; the Census Bureau calculates it for new single-family homes.

Question

Short answer. The median home price is the middle value when all closed sales in a period are ranked by price — half sold above it, half below. NAR calculates it monthly for existing homes; the Census Bureau calculates it for new single-family homes.

How NAR calculates the median existing home price
Step	Process
1. Collect closed sales	NAR gathers MLS-reported transactions from REALTORS
2. Rank by price	All prices sorted lowest to highest
3. Find midpoint	Median = value at exact middle of the list
4. Report monthly	Published approx. 3 weeks after month-end
5. Seasonal adjustment	Also published as seasonally adjusted annual rate (SAAR)

The median is a positional statistic: it is simply the value that falls in the middle of a distribution. If there are 10,000 home sales in a month and you sort them from cheapest to most expensive, the median is the price of the 5,000th home. It is not calculated from a formula — it is directly observed from transaction data.

Why median rather than average (mean)?

Home prices are highly skewed — a small number of very expensive properties can dramatically inflate the mean without reflecting what typical buyers experience. The median is resistant to outliers. If a single $50 million mansion sells in a market where 1,000 homes sell for $300,000–$400,000, it barely moves the median but significantly raises the mean. For this reason, NAR, the Census Bureau, and most housing analysts report median prices as the headline measure.

NAR (existing homes)

The National Association of Realtors reports median existing-home sale prices monthly, compiled from closing data submitted by member MLSs (Multiple Listing Services) across the country. The 2024 annual median was $408,000. Existing homes include single-family homes, condos, co-ops, and townhomes.

Census Bureau (new homes)

The U.S. Census Bureau's Survey of Construction tracks new single-family homes only. Builders report sale prices at contract signing (not closing), so new-home median prices lead closing prices by 6–9 months. The 2024 median new single-family price was $458,200. New homes carry a premium over existing homes partly because they are typically larger, more energy-efficient, and located in new developments where land has been recently subdivided.

Seasonal adjustment

Both series are reported both seasonally adjusted and unadjusted. Unadjusted medians tend to peak in summer (when larger homes sell) and trough in winter (when smaller, cheaper homes represent a larger share of sales). The seasonal swing can be 5–10% of the headline price.

Sources

National Association of Realtors Existing Home Sales methodology; U.S. Census Bureau Survey of Construction methodology; Bureau of Labor Statistics price index guidance.