• US Housing Market in 2025: Inventory Grows, Prices Persist, Affordability Struggles

  • May 2 2025
  • Length: 2 mins
  • Podcast

US Housing Market in 2025: Inventory Grows, Prices Persist, Affordability Struggles

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  • Summary

  • US Housing Market Update: May 2025

    The US housing market continues to show mixed signals as we enter May 2025. According to the latest data released this week, housing inventory has seen a significant increase, rising nearly 20% year-over-year, giving buyers more options especially in the South and West regions where inventory growth has reached 31.1% and 40.3% respectively.

    The National Association of Realtors reported that total housing inventory at the end of March stood at 1.33 million units, up 8.1% from February 2025. Notably, newly built homes now represent 31.4% of all homes for sale, providing more choices for potential buyers.

    Despite increased inventory, home prices continue their upward trajectory. The median existing-home sales price reached $403,700 in March 2025, marking a 2.7% increase from last year and setting a new record for the month. However, experts predict that home-price appreciation will slow to an average growth of 2% for the remainder of 2025, compared to 4.5% growth in 2024.

    Industry analysts remain cautious about the market outlook. While 21 out of 23 industry leaders forecast price appreciation in 2025, home price signals have been weakening, with pending home sales prices almost turning negative according to recent reports.

    Mortgage rates continue to be a significant factor affecting affordability. Experts predict rates will likely remain elevated throughout 2025, potentially "bouncing around" 7% for the year, continuing to create challenges for first-time homebuyers.

    The housing shortfall remains a persistent issue, with economists previously estimating a deficit of up to 5 million homes. This shortage, combined with high mortgage rates and rising prices, contributed to home sales hitting a nearly 30-year low in 2024.

    As we move further into 2025, the housing market faces continued pressure from these factors, though increased inventory may provide some relief for determined buyers in what remains a challenging market environment.
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