Week of July 7: The first week of July finds the U.S. residential real estate market showing more signs of balance. After a frenzied few years, conditions are gradually tilting in buyers’ favor as inventory grows and mortgage rates ease. However, affordability challenges persist, and consumer sentiment – while improved – remains cautious. Below is a national overview of current trends in inventory, mortgage rates, home prices, buyer/seller activity, and consumer mood, with insights on what real estate agents should watch and communicate to clients this week.
Inventory on the Rise, Homes Staying on Market Longer
Housing supply is improving. New sellers are listing homes at a higher rate than last year, which is boosting the number of active listings on the market. In fact, new listings for the last week of June were up about 3.8% compared to the same week a year ago. This influx of fresh inventory is giving buyers more options and a bit more negotiating power in many areas. Homes are also taking a little longer to sell – the median time on market hit 54 days, roughly five days longer than this time last year. That’s similar to what we saw in pre-pandemic summers, indicating a return toward more normal market timing.
With properties sitting slightly longer, the total number of homes for sale has grown substantially. Nationwide active inventory is now 27% higher than a year ago, climbing back above the 1 million mark and reaching the highest level since late 2019.
In fact, the U.S. has now logged eight straight weeks with over 1 million homes on the market, a notable change from the ultra-low inventory of the past few years. Much of this inventory growth is driven by more sellers listing (including builders ramping up new construction in some regions).
Notably, many Sun Belt markets (in the South) now even have more active listings than they did pre-COVID, thanks in part to increased homebuilding in recent years. For agents, this trend means you may finally have a bit more breathing room when helping buyers shop – and you’ll need to adjust pricing strategies for sellers who face rising competition.
However, note: while supply is up year-over-year, the pace of improvement has moderated a bit. In early summer the growth in listings has slowed compared to the spring – the uptick in new listings has been below the year-to-date pace for five weeks in a row, suggesting that while inventory is improving, the shift toward a buyer-friendlier market is gradual.
In other words, we’re not seeing a sudden flood of homes for sale, but rather a steady easing. As an agent, you should continue to monitor local listing trends. If your market saw a big surge of new listings in spring, that wave might be leveling off.
- Buyers should still act decisively on homes they love (good deals won’t sit forever), but they can be relieved that the days of frantic 24-hour turnaround offers are fading.
- Sellers, on the other hand, should no longer expect instant bidding wars; instead, advise them to prepare for a more typical selling timeline and to make their homes stand out (through staging, proper pricing, etc.) to compete in a larger pool of listings.
Mortgage Rates Ease, Luring Back Buyers
After climbing to multi-year highs, mortgage rates have actually been drifting down in recent weeks – a welcome development for both buyers and sellers. As of the first week of July, the average 30-year fixed mortgage rate is around 6.67%, according to Freddie Mac, down from roughly 6.8–7% a month or two ago.
In fact, rates have declined for five weeks in a row heading into the July 4th holiday weekend. Freddie Mac noted this was the largest weekly drop in rates since early March and called the trend “encouraging.” Lower financing costs, combined with more homes coming onto the market, are giving prospective buyers a growing advantage.
Buyers appear to be responding to these slightly lower rates and increased choice. Mortgage applications for home purchases are up compared to last year – roughly 16% higher than the same week in 2024. This jump in loan applications (based on Mortgage Bankers Association data) suggests renewed interest from buyers after a sluggish spring.
Many house hunters had pressed “pause” earlier in the year when rates were peaking and inventory was scarce, but some of that pent-up demand is trickling back as conditions improve. Real estate agents might notice more first-time buyers resurfacing or former clients re-engaging now that borrowing costs have ticked down slightly and there are more listings to see.
If you’re working with buyers, this is a good time to reach out to those who were discouraged in the spring – they may be ready to resume the search with fresh optimism (and possibly refreshed pre-approvals reflecting current rates).
That said, it’s important to set realistic expectations. A 30-year rate in the mid-6% range is still much higher than the 3%–4% rates many buyers remember from a couple years ago.
Affordability remains a challenge, especially with home prices still near record highs in many markets.
Economic uncertainty also lingers – for example, a very strong June jobs report means the Federal Reserve is unlikely to cut interest rates anytime soon, which could keep mortgage rates from falling much further in the immediate term.
- Buyers shouldn’t expect rates to plummet back to pandemic lows, and they’ll need to budget for the larger monthly payments that today’s rates bring. As an agent, you can help clients navigate this by connecting them with lenders who offer rate buydowns, ARMs, or other financing strategies to improve affordability.
- On the flip side, sellers should understand that many buyers are price-sensitive right now – even a small rate change can affect what house hunters can afford. This is one reason we’re seeing more price adjustments on listings (more on that below). Sellers might consider offering concessions like helping with closing costs or paying for a temporary mortgage rate buydown to attract budget-stretched buyers, especially if their home has been on the market for a while.
Home Prices Level Off as Market Balances Out
For the past few years, home prices were on a tear, but now price growth has essentially hit pause. Nationally, list prices are flat to slightly up compared to a year ago – the median list price is only about 0.2% higher than this time last year.
In other words, prices are holding steady at 2024 levels, a big change from the double-digit annual gains we saw during the peak of the seller’s market. In fact, year-to-date median list prices are actually slightly lower (down ~0.3%) than they were by mid-year 2024.
Essentially, home prices have been moving sideways overall, with some local markets seeing small upticks and others slight dips. For many agents and their clients, this stabilization is a relief – it indicates the market is moving toward equilibrium rather than an ongoing spiral of ever-higher prices.
Crucially, sellers are adjusting their expectations. We’re now seeing more price cuts on listings, something that was rare during the red-hot market of 2021–2022. Over 1 in 5 sellers nationwide have been cutting their asking price to attract buyers.
According to Realtor.com’s economists, this trend of increased price reductions is a sign that the market is tilting back toward balance, giving buyers a bit more leverage after years of seller dominance. Slower price growth and more frequent price adjustments mean buyers can negotiate more confidently – you might be able to get that offer accepted below list price or with contingencies intact, scenarios that were unheard of in the recent past.
For agents, communicating these pricing trends is key.
- If you’re representing sellers, emphasize that overpricing a home is risky in today’s climate – buyers now have alternatives and are less likely to bid over asking for an overpriced property. Homes that are priced right (in line with recent comps, and accounting for the fact that prices aren’t rising like before) are the ones attracting attention. If a listing isn’t getting offers after a few weeks, a proactive price reduction might be necessary. The good news is that well-priced, move-in-ready homes are still selling – often quickly – but the days of “throw it on the market at any price and it will sell” are over.
- If you’re working with buyers, you can point out that they may not need to pay a huge premium over list price anymore. There’s more room to include inspection or appraisal contingencies, request repairs, or even get seller concessions (like help with closing costs) in some transactions. We’re inching back to a market where both parties have a say – a healthier balance than the one-sided bidding wars of the recent past.
In some markets, especially those that saw the biggest surge in prices the last few years, prices have plateaued or even dipped slightly as inventory improves. (Recent data showed national resale home prices down a touch month-to-month this spring, even though they remained a few percent higher than a year ago.)
It’s a reminder that real estate is local – agents should keep a close eye on their local MLS stats. Are median prices in your area trending down a bit, or holding steady? Share these insights with your clients. Buyers will be encouraged to hear that prices aren’t skyrocketing anymore, and sellers will understand why they can’t expect last year’s record-high prices plus 10%.
Overall, a flattening of prices is indicative of a more sustainable market. As one industry economist put it, with inventory on the rise and more sellers cutting prices, the market is moving back toward a balance, marked by slowing price growth and increasing buyer leverage.
In practical terms, that means agents should prepare for a market that requires skillful negotiation and pricing strategy on both sides – the kind of fundamentals that define a balanced market.
Buyer & Seller Activity – Signs of Life after a Slow Spring
The early part of 2025 was relatively quiet in many housing markets – high rates and high prices kept a lot of buyers and sellers on the sidelines. Now, as we get into mid-summer, there are signs of increased activity. We already noted that mortgage applications for purchases are higher than last year, indicating more buyers entering the fray.
In addition, some hard sales data from late spring hints at a turning point: May was sluggish (new home sales were down ~6.3% year-over-year and existing home sales were down slightly, –0.7% YoY), but June and July are looking more promising.
Agents across many regions report better foot traffic at open houses and more inquiries from buyers as compared to the very slow winter. Part of this is seasonal (summer is typically peak home-shopping season), but part is the cumulative effect of improved conditions.
Buyers who sat out 2024 due to sticker shock might have adjusted their expectations and are now re-entering the market, especially as they see prices stabilizing and feel a bit more confident about not overpaying.
On the seller side, we are indeed seeing more homeowners decide to list, which is a positive development. Some sellers were hesitant to give up their ultra-low mortgage rates (the so-called “lock-in effect” kept many would-be movers in place), but as home values remain high and life events spur moves, listings are trickling up. We still hear that a chunk of homeowners – notably many Baby Boomers – are content to stay put longer, which continues to constrain supply in some neighborhoods.
(One recent survey found about 30% of Boomers plan to stay in their current home indefinitely and another 30% don’t plan to move for 10+ years, a trend that can limit inventory coming from that huge demographic.)
Nonetheless, the slight increase in resale listings combined with a robust pipeline of newly built homes is giving today’s buyers more choice than they’ve had in awhile.
For real estate agents working this market, a few tactical points stand out this week...
Follow up with old leads
Those buyers who said “we’re going to wait until the market cools” – well, the market has cooled in many respects. Reach out with an update: let them know inventory is up and rates have dipped. Some may be ready to hear that news and jump back in.
Counsel sellers on pricing and patience
Make sure your selling clients know the latest stats (e.g., inventory up 27%, time on market up by nearly a week). Use that to set expectations: it’s normal now for a home to take a month or two to sell. If they only get a few showings in the first week, that’s not cause for panic but rather a prompt to ensure the home is priced competitively and showing well. Encourage flexibility – the first offer they get might come in a bit under asking; it could be wise to entertain it seriously rather than holding out for an over-asking unicorn.
Watch mortgage rate fluctuations
We’ve enjoyed several weeks of easing rates, which has helped demand. Keep an eye on economic news (inflation reports, Fed meetings, etc.) that could nudge rates up or down. For instance, news of job growth or Fed policy can quickly affect consumer borrowing costs. As of now, rates around 6.6–6.7% have opened a small window of opportunity – if that window looks likely to close (say, if rates tick back up toward 7%), you might advise indecisive buyers to act sooner rather than later. Conversely, if rates continue a gentle downward trend, that could pull even more buyers into the market later this summer.
Leverage the balanced market in negotiations
In the past two years, buyers had very little leverage – now they have some. If you represent buyers, don’t be afraid to ask for repairs after inspections or to include contingencies that protect your client; the market is no longer automatically rejecting those requests. If you represent sellers, be ready to see such requests and negotiate accordingly. It’s a more give-and-take environment now. Homes are still selling at high prices, but buyers expect a bit more consideration since they know they aren’t the only ones at the table anymore. A deal can still come together smoothly, but it might require more negotiating finesse than during the boom, when almost any offer term would fly as long as the price was sky-high.
Consumer Sentiment — Cautious Optimism is Growing
It’s no secret that the past year or two left many potential buyers feeling discouraged. Consumer sentiment about the housing market hit record lows in 2022 when affordability worsened. The good news is that attitudes are gradually improving. According to Fannie Mae’s National Housing Survey, housing confidence in May 2025 reached its highest level since late 2024.
Their Home Purchase Sentiment Index rose to about 73.5 in May, a significant rebound from the extreme pessimism of late 2022 (when that index hit an all-time low around 56).
What’s driving this brighter outlook? Mainly, increased optimism about mortgage rates (more people now believe rates will fall or at least stop rising) and a sense that buying conditions and selling conditions have improved slightly.
That said, consumers are still wary. Even after the recent uptick in optimism, only 26% of surveyed consumers in May said it was a good time to buy a home – the vast majority (74%) still felt it was a bad time to buy.
The silver lining is that a year ago, the “good time to buy” percentage was a dismal 14%, so we’ve nearly doubled the share of people who see a window of opportunity. It’s a move in the right direction, but clearly most buyers remain cautious. They’re concerned about high home prices, high (albeit easing) interest rates, and general economic uncertainties.
On the seller side, people remain more upbeat: about 61% said it’s a good time to sell in the latest survey\. That makes sense – homeowners recognize that prices are near record highs and that if they sell now, they can likely lock in considerable equity gains (especially if they owned their home for several years). However, even seller sentiment has tempered a bit from the absolute euphoria we saw when prices were skyrocketing.
Notably, in June 2025, overall housing sentiment edged down slightly (Fannie Mae’s index ticked down a few points to 69.8) as economic worries crept back in. This tells us that consumers are sensitive to news – headlines about mortgage rate changes, the Fed, layoffs or job growth, etc., can quickly influence whether people feel confident about making a big decision like buying or selling a home.
Sources
- Realtor.com Economic Research, “Weekly Housing Trends Update (late June 2025)”: sfgate.com
- Freddie Mac, Primary Mortgage Market Survey (July 3, 2025): freddiemac.com – Weekly mortgage rate update
- Mortgage Bankers Association data via Realtor.com: sfgate.com – Purchase application trends
- National Association of Realtors® / Census Bureau – May 2025 existing and new home sales stats: sfgate.com
- Fannie Mae Home Purchase Sentiment Index (May–June 2025): housingwire.com fanniemae.com – Consumer housing sentiment findings
- HousingWire News, market sentiment analysis (June 2025): housingwire.com housingwire.com