The median home price is the threshold which divides the real estate market into two equal halves, in reference to pricing. One half of all homes in the market were sold at a price above the median home price, while the other half were sold below that price. For example, the median home price in the United States was $213,900 in the fourth quarter of 2005, meaning that half of all homes sold in the US were priced above $213,900, and half were priced below $213,900. In California, the median home price was $548,000.
The median home price is one of the most common measurements used to compare real estate prices in different markets, areas, and periods. It is said to be less biased than the average since it is not as heavily influenced by the top 2% of homes sold. For example, the average home sale price in the US was $264,000 in October 2005, compared with a median home price of $213,900 for the same time period.
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