Warwick, R.I., January 22, 2025 – Rhode Island’s housing shortage showed little improvement from December 2024 to December 2025, contributing to sustained price increases. Though the month closed out with a 13.7% increase in the number of single-family homes listed on the market since December of last year, pent-up demand continued to deplete available inventory, causing the state’s housing supply to remain relatively flat from a year ago. As a result of the persistent low inventory, at $496,950, the monthly median price of December’s single-family home sales represented a 5.7 percent year-over-year increase.

The National Association of Realtors recently reported that there is a 3.3-month supply of single-family homes and condominiums nationwide. Rhode Island, by comparison, has less than a two-month supply, far below the five to six months of inventory needed for buyers to regain a better negotiating position. Despite that, the number of Rhode Island’s closed sales increased 3.3% last month, though homes under contract last month fell 3.1% compared to December 2024. While falling pending sales typically signify fewer closed transactions in the weeks ahead, lower interest rates could reverse that outcome.

Transitioning to 2026

Though sales picked up by 3.3% throughout 2024 following 2023’s historically slow market, the momentum eased in 2025. The number of single-family homes sold in 2025 was just 1.3% higher than the previous year.

“Last year’s median sales price came in just shy of $500,000 at $499,900. It’s not hard to figure out why owning a home is a privilege that is accessible to fewer people every day. It’s hard for a first-time buyer to compete with wealthier out-of-staters or baby boomers looking to downsize. Thankfully mortgage rates are coming down. That won’t be the magic bullet that changes the trajectory of our housing crisis, but every little bit helps,” said Pereira.

Condominium Sales Grow

At $390,000, the attractive lower median price of condominiums in 2025 helped sales grow by 5.8% from 2024. The year ended with a monthly annual increase of 13.8% when comparing condominium sales in December 2024 to those in December 2025. The median December price of $349,900 was the lowest monthly median price recorded, which likely impacted the end-of-year spark in activity.

“The condominium market offers less expensive options for first-time buyers. That’s what helped that sector of the market realize the largest increase in sales activity of all housing types. Creating more of these types of developments can go a long way in eliminating our housing shortage,” commented Pereira.

Multifamily Homes See the Largest Price Gains

By the end of the year, the median price of multifamily homes sold in December was up 9.2% from 12 months earlier to $595,000, and up 8.2% overall for the year.

Last year, multifamily home sales stayed relatively stable from 2024, rising just .52%,  however sales picked up in December with an annual gain of 7.3% and a slight uptick in pending sales of 1.7%.

“We saw double-digit growth every month in the number of multifamily homes on the market from 2024 to 2025 but it’s still a sellers’ market with low inventory and demand for these types of properties is high. They offer benefits for a wide array of Rhode Islanders, from first-time homeowners and multi-generational families to investors. Ensuring that Rhode Islanders are in a competitive position in this investor-driven market is important,” said Michael Pereira, President of the Rhode Island Association of Realtors.

Other Influences on R.I.’s Housing Market

Last year, buyers from other states accounted for 22.5% of all residential sales and 41.1%  of homes sold for $1 million or more. More than 12% of last year’s residential sales came from Massachusetts alone, where the 2025 single-family home median price of $638,000 positions Rhode Island as the bargain across the border.

Additionally, research from the National Association of Realtors showed the share of sales from institutional buyers rose from 15.1% in 2019 to 15.7% in 2024. While the national share remained relatively stable, Rhode Island’s share saw a dramatic increase, from 10.9% to 22.5% during the same period.

Both issues hurt affordability for local residents by creating more competition in an extremely tight market.

“The inventory shortage—an issue predating the pandemic—has been intensified by the 'lock-in effect' of historically low interest rates from previous years. And in Rhode Island, we face a unique challenge - our median home price now exceeds the national average, yet our household income lags behind. This creates an environment where high earners from both in and out-of-state, hold a distinct competitive advantage. Lower mortgage rates can help our buyers compete, but it’s clear that our housing crisis is a deep-seated issue that requires a multifaceted, strategic response. There is no one size fits all answer,” said Pereira.

The home sales data released by the Rhode Island Association of Realtors includes all Rhode Island real estate sales transacted through State-Wide Multiple Listing Service, a subsidiary of the Rhode Island Association of Realtors.