Week of June 16: Even as the summer sun sizzles, the housing market is chilling out – in a good way. Mid-2025 is serving up a more balanced scene that we haven’t enjoyed in years. After the rollercoaster of the 2020-2022 boom (and the cooldown that followed), we’re finally finding a Goldilocks vibe in many areas – not too hot, not too cold.
Higher interest rates and a long-awaited boost in housing supply have taken some of the frenzy out of the market, giving buyers and sellers a chance to catch their breath. Let’s break down the highlights of this “heat wave, cool market” trend.
💼 Interest Rates Hovering in the Mid-6% Range
Yes, rates are up compared to the rock-bottom pandemic era, but they’ve steadied. The average 30-year fixed mortgage has been bouncing around 6.5% (give or take a bit) for much of 2025.
That’s a far cry from the 3% loans of yesteryear, but here’s the silver lining – the pace of rate hikes has slowed, and experts predict rates will stay in this mid-6 territory for the foreseeable future.
In other words, the uncertainty has eased. Buyers know what to expect, and while financing is pricier, it’s at least relatively stable. This higher-rate environment has cooled some of the demand (fewer people are refinancing or moving just to chase a rate), which has helped take the edge off competition.
🔼 Inventory is Up, Finally
Perhaps the biggest game-changer – we have more homes on the market now than a year ago. In fact, January 2025 marked the 15th straight month of inventory growth nationwide, according to Realtor.com data, with the number of homes for sale about 24% higher than it was in January 2024. This trend continued into the summer.
By spring 2025, total housing inventory (existing homes) reached roughly a 4.4-month supply, up from about 4.0 months a year prior.
For context, a “balanced” market is usually around 5 to 6 months of supply, so we’re not fully there yet, but this is the best inventory situation buyers have seen in a long time – roughly a 20% improvement year-over-year in supply levels.
More homes on the market mean more choices for buyers and a bit less upward pressure on prices.
🐌 Price Growth Has Eased into a Slow Simmer
During the peak frenzy, home prices were skyrocketing double-digits annually. That boil has cooled. Nationally, price appreciation is now modest – think low single-digit percentages year-over-year. For instance, the famous Case-Shiller Index showed home prices in early 2025 rising only about 3–4% year-over-year, a far cry from the 15-20% gains we saw in 2021.
In some particularly hot markets, prices even dipped slightly before stabilizing. Essentially, we’ve transitioned to a phase of gradual, sustainable growth instead of runaway inflation in home values. This is a healthy development. Buyers aren’t having to chase a moving price target as aggressively, and appraisals are catching up, making financed deals less hairy.
Sellers, meanwhile, can still enjoy record-high equity – prices aren’t really falling, just rising at a manageable pace. It’s more of a gentle summer simmer than a rolling boil.
🚧 Bidding Wars are Less Intense (but Not Extinct)
Over the past couple years, we got used to every decent listing getting 10+ offers in 48 hours. Now, with the cool-down, we’re seeing a more normal rhythm. Homes aren’t flying off the shelf quite as fast, and buyers often have a chance (finally!) to include contingencies or even gasp negotiate on price.
The data backs this up: as of January 2025, only about 22% of homes were selling above asking price. Compare that to the frenzy days when 50% or more sold over list in many areas – it’s a big shift.
That said, a well-priced, move-in-ready home can still ignite a mini bidding war quicker than you can say “hot listing.” The market “cooling” doesn’t mean cold. In desirable neighborhoods, if a house is turnkey and priced fairly, you might still see multiple parties vying for it.
The difference now is those situations are the exception, not the rule. Smart strategy trumps sheer speed. Buyers can be a bit more patient and selective, and sellers may entertain one offer at a time rather than sifting through a giant stack.
☯️ Balance
So what we have is a more balanced market – a refreshing change. It’s not officially a buyer’s market (in most places, sellers still have a slight edge because inventory, while up, isn’t oversupplied). But it’s certainly not the extreme seller’s market of 2022 either. It’s a healthy middle.
In this environment, quality of negotiation beats quantity of offers. Agents are shifting from the panic-driven “offer anything and waive everything” approach to a more tactical game of matchmaking and bargaining.
- Buyers with solid financing and good guidance can finally secure homes without losing their sanity.
- Sellers, if realistic, can still achieve great prices, but they might actually have to converse with one buyer at a time and consider a contingency or two.
🧭 Tips for Navigating the “Heat Wave, Cool Market”
Buyers should use this breathing room to their advantage – do their due diligence, negotiate repairs or credits, and lock in a home that truly fits (there may be more on the market to choose from now). Just because the frenzy has eased doesn’t mean they should expect a steal; well-priced homes will still move quickly, so they should stay alert and decisive on those.
Sellers shouldn't get complacent. Homes will sit if overpriced or not presented well. They should work with you (the agent) on pricing strategy and prep – the days of 15 offers in a weekend are gone for most, but one good offer is all you need. They should consider highlighting features like new appliances or a great home office setup that add value; buyers aren’t waiving inspections blindly anymore, so they should make their home stand out for the right reasons.
Overall, this cooler summer housing climate is welcome. It’s edging us back toward equilibrium, where smart strategy and savvy negotiation win the day over sheer speed and luck. Kind of nice, isn’t it? After a wild few years, a market that’s a little less “hot” feels just right. Stay on your toes (there’s always some heat in real estate, after all), but enjoy the cooler breeze of balance while it lasts.
It’s an opportunity for everyone – buyers, sellers, and agents – to make more thoughtful, informed moves in the market. And that is pretty cool.
Happy summer, and here’s to a chill (but successful) season for all!