As of early July 2025, the U.S. residential real estate market continues to evolve, with key indicators signaling a buyer’s market. Months’ supply of homes on the market has expanded to about 4.4 months, the highest level seen since 2019—signaling a shift after years of tight inventory and fierce competition.
Nationally, the number of homes for sale has increased for 19 straight months, now over 30% above year-ago levels. Major metro areas—Seattle, Dallas, Austin, and Denver—have seen listings exceed pre-pandemic norms, with Denver’s inventory doubling since 2019. Still, overall supply remains below the balanced market benchmark of six months.
Existing-home sales are holding roughly steady at a 4.03 million annualized pace as of May, with slight monthly increases from April. However, sales remain well below pre-pandemic activity, hovering around 75% of normal. The market has slowed significantly, with April marking the lowest sales pace for that month since 2009.
Mortgage rates are in the high‑6% range, with the typical 30‑year fixed mortgage hovering around 6.8%, near its 2025 peak. While analysts had hoped for a mid-year dip, rates remain firmly elevated, adding pressure on buyers and affecting overall affordability.
Home prices have stayed resilient despite growing inventory. Median existing-home prices reached $422,800 in May, up 1.3% year-over-year. While sellers are increasingly cutting prices—nearly 19–23% of listings saw reductions this spring—the overall trend points to flattening price growth rather than a dramatic correction. Zillow’s latest forecast suggests a 0.7–2% national price decline through the end of 2025, marking the first annual drop since 2011.
Builders are responding to the easing market by offering incentives to attract buyers, including upgrades, price discounts, and promotional financing. Virtual tours and 3D floorplans—features popularized and scaled by platforms like Zillow—are empowering buyers to explore listings more thoroughly and negotiate with greater confidence.
The rise in inventory and slower sales are shifting leverage toward buyers. Offers below asking price are becoming more common in several metro areas that were once highly competitive. Summer 2025 may offer a sweet spot for buyers: high choice, more motivated sellers, and tech-driven tools that streamline the home search process.
Buying decisions continue to hinge heavily on mortgage rate trends. Even slight dips from current levels could reignite competition, while ongoing rate stability or increases may prolong buyer advantage. In this environment, new construction is presenting notable value. With nearly 9.8 months’ supply of new homes available as of May, builders are actively courting buyers with incentives, making it a viable option for those priced out of the existing-home market.
It is also important to recognize that regional variation remains strong. While some cities are experiencing an inventory surge, others continue to struggle with shortages. Prospective buyers should pay close attention to local dynamics rather than relying solely on national averages.
Summer 2025 marks a pivotal moment in the U.S. housing market. Elevated inventory, firm mortgage rates, and a modest price forecast set the stage for buyer-friendly dynamics. Those equipped with virtual tools, regional knowledge, and readiness to act could find compelling deals—especially in new construction segments and emerging metro markets.
For experts, policymakers, and would-be homeowners, the coming months may offer a real chance to reset and recalibrate in a market adapting to post-pandemic normalcy.