The 2025 Housing Market: Cooling, Yet Surprisingly Resilient
The real estate market is always evolving, and 2025 is proving no different. After the frenzy of the pandemic years, conditions have cooled—yet the fundamentals remain strong. Home values still rose 3.7% on average, while existing home sales and prices ticked up 0.8% and 0.2% year-over-year, respectively. Mortgage rates remain higher than during 2020–2022, making affordability tougher, but the market’s core remains healthy. Here’s a data-driven look at key trends shaping today’s housing landscape.
1. Home Sales Are Normalizing
According to the National Association of Realtors (NAR), July 2025 existing-home sales nationally hit 4.01 million, with 4.6 months of inventory and with a median price of $258,370 in Juneau County, WI.
- A balanced market is around 6 months of inventory, so we’re still in a mild seller’s market with an average days on market of 60days, but not the red-hot one of recent years.
- Homes are taking a bit longer to sell than during the 2020–2022 whirlwind, reflecting stability rather than weakness.
2. Pending Home Sales Are Slowing
The NAR’s Pending Home Sales Index for June 2025 registered 72.0, with modest month-over-month drops across all regions.
- Fewer pending deals may feel negative, but it gives buyers more breathing room to evaluate options and negotiate, reducing rushed decisions.
3. Prices Still Expected to Rise
Multiple forecasts (Fannie Mae, MBA, NAR) predict 1–2% annual home-price growth in 2025 and 2026.
- While far from pandemic-era spikes, these steady gains signal that waiting for a major price drop may backfire.
- Buyers who delay could face higher purchase prices, larger down payments, and increased property taxes.
4. More Seller Listings Offer Buyers Choices
Realtor.com reports 434,816 newly listed homes in July 2025, a 7.3% year-over-year increase.
- More inventory helps buyers find the right fit and negotiate more confidently.
- For sellers, it’s a call to accurately price your property to stand out competively.
5. Listing Prices Are Holding
Median list prices nationally have hovered between $390K and $440K over the past year and are up 0.5% YoY.
- Nationally, prices are stable, proving the market is cooling without collapsing.
6. Real Estate Remains the Top Long-Term Investment
A Gallup survey shows 37% of Americans rank real estate as the best long-term investment, beating gold, stocks, and crypto.
- Homeownership continues to be a proven path to building wealth, despite short-term fluctuations.
7. Sales Forecasts Show Sustainable Growth
Zillow projects 4.09 million home sales in 2025, just a 0.6% increase from 2024.
- Slower growth = more sustainability, a healthier sign than the explosive (and unsustainable) pandemic gains.
8. Construction Has Finally Recovered
U.S. construction employment recently surpassed pre-2008 levels, adding 250,000 jobs in a few years.
- Increased building could help ease supply constraints and moderate price growth over time.
9. Mortgage Rates May Ease
Fannie Mae expects mortgage rates to average around 6.0% in 2025, down from roughly 6.4% in 2024.
- Even a small rate drop can reduce monthly payments, improving affordability for buyers on the fence.
10. Inflation Is Still the Top Money Worry
Gallup surveys show inflation/high cost of living remains Americans’ primary financial concern, though slightly less than last year.
- Using a real estate agent can help buyers navigate affordability with insights on lower-cost areas and financial-assistance programs.
Key Takeaways for Buyers and Sellers
- Buyers: Stable prices and rising inventory mean more choice and negotiating power. Acting before mortgage rates dip could secure today’s prices and avoid future competition.
- Sellers: While the market is less frenzied, demand is steady. Correct pricing and strong marketing are essential to stand out.
- Agents: Knowledge of these trends builds trust and positions you as a strategic advisor in any market cycle.
Bottom line: The 2025 housing market isn’t crashing—it’s finding its balance. With modest price growth, steady demand, and improving inventory, real estate remains a solid long-term investment and a cornerstone of financial security.
Liz Walker Real Estate 