📈 Market Highlight: What's Moving (and What's Not)

Week of July 21: This week, the U.S. residential real estate market is showing signs of a slow but steady rebalance. Mortgage rates remain elevated (hovering around the high-6% range for a 30-year fixed loan), which continues to challenge affordability for many buyers. However, housing inventory is finally improving from the record lows of the past few years, giving buyers more options than they’ve had in recent memory. Home price growth has essentially leveled off nationally, and homes are taking a bit longer to sell.

This week’s Market Highlight will overview key national trends in mortgage rates, home prices, inventory, buyer/seller activity, and consumer sentiment, with an eye on the latest changes, challenges, and opportunities for real estate professionals.

Mortgage Rates

Mortgage rates in mid-July 2025 are just under 7% on average for a 30-year fixed loan. Last week saw a slight uptick in rates (around 6.75% now, up from about 6.7% the week prior) after a modest rise in inflation. Overall, rates have been moving within a narrow band in the mid-6% range for several months. While this stability is a relief compared to the volatile jumps of last year, today’s rates are nearly double what many buyers enjoyed in 2020-2021, creating a very different buying power landscape. Higher rates translate to substantially larger monthly payments, so affordability is a top concern. A typical middle-income household can afford far fewer homes at these rates than they could a few years ago, forcing many buyers to adjust their expectations on home size or location.

On the bright side, some house hunters are finding creative ways to cope. Lenders and sellers are increasingly offering rate buydowns or other financing incentives, and more buyers are considering adjustable-rate mortgages (ARMs) or shorter-term loans to secure a lower initial rate. Many buyers also understand that while “marrying the house and dating the rate” isn’t ideal, they can refinance later if and when rates ease. For now, however, high mortgage rates are the “new normal”, and both buyers and agents are learning to work within this reality. It’s worth noting that many current homeowners are “locked in” with ultra-low pandemic-era mortgages (often 3-4%), making them hesitant to sell and give up that rate, a factor that’s indirectly keeping inventory in check (more on that below).

Prepare to counsel buyers on affordability strategies. Be ready to explain financing options like 2-1 buydowns, ARMs, or down payment assistance programs. When working with sellers, recognize that higher rates shrink the buyer pool, so pricing and marketing must account for more budget-conscious shoppers. The upside is that with rates relatively steady (not spiking unpredictably), buyers who are motivated can adjust their plans, and agents can help them navigate creative solutions to make the numbers work.

Home Prices and Sales

After years of double-digit jumps, home prices nationwide have largely flattened out. The median price of an existing home in the U.S. is currently in the low-$400,000s (around $422–$425K), which is just a hair above where it was a year ago (roughly 1% higher). In fact, this past May’s national median price set a record for that month, but only by a small margin. In short, prices are holding near all-time highs, yet year-over-year appreciation is minimal – a big change from the runaway gains seen during the pandemic boom. Higher interest rates have put a cap on how high buyers can bid, effectively pressuring sellers to price more realistically.

We’re also seeing fewer extreme bidding wars. A year or two ago, it wasn’t uncommon for desirable listings to get 10+ offers and sell for well over asking price. Now, while multiple offers still happen in some hot pockets, it’s more tempered. Many homes are selling at or even slightly below asking price. In fact, about 1 in 5 listings nationally has had to cut its price before finding a buyer – the highest rate of price reductions in the month of June in nearly a decade. This doesn’t mean prices are crashing; rather, it means sellers are adjusting to a cooler demand environment. For agents, this shift underscores the importance of accurate pricing and managing client expectations. Homes that are overpriced relative to the market are increasingly sitting unsold until the price is improved.

Speaking of time on market, houses aren’t flying off the shelf quite like they used to. The typical home is now on the market for about 50-55 days, which is roughly a week longer than this time last year. A slightly longer selling timeline can be frustrating to impatient sellers, but it also gives buyers a bit more breathing room to consider a home (instead of making a do-or-die offer the same day). Overall, existing-home sales volume remains subdued.

Nationwide, the annualized pace of home sales is hovering around 4 million units, which is about 25% below the typical 5 to 5.5 million we saw in the late 2010s. This lower sales pace has been fairly consistent for the past year, as many would-be buyers and sellers remain sidelined by the rate environment. The good news is sales are no longer plummeting. They’ve basically stabilized at a slower (but steady) clip, and even ticked up slightly month-to-month recently. If mortgage rates were to decline, you’d likely see some of that pent-up activity return. But for now, a lot of business is “on hold,” which means every deal counts that much more for agents still active in the market.

Pricing expertise is more critical than ever. Conduct thorough CMAs and communicate to sellers that overpricing will hurt them in this market. Emphasize preparation: staging, minor repairs, and strong marketing can make a real difference in getting a home sold. For buyer’s agents, the calmer market means you often have a shot at negotiating, whether it’s contingencies, inspection repairs, or even a bit off the asking price. Use this opportunity to advocate for your buyers, many of whom haven’t had bargaining power in years. A balanced market rewards skillful negotiation, so dust off those skills!

Inventory: More Homes for Sale (Finally!)

Perhaps the biggest change agents are feeling this year is the improvement in housing inventory. After several years of an extreme shortage of listings, more “For Sale” signs are popping up across America. Nationwide, the number of active listings is up roughly 20-30% compared to last summer, and for the first time since 2019, the total homes on the market has crested above one million. In other words, buyers have more choices now than they’ve had in a long time. This swelling of inventory is partly because more sellers are coming off the sidelines (enticed by still-high prices and perhaps life changes), and partly because homes are sitting on the market a bit longer (so listings accumulate instead of vanishing in a weekend).

Even with this growth, we need to put it in perspective: inventory is still not fully back to “normal.” According to recent research estimates, the current number of homes for sale remains about 10-15% below the typical levels we saw in the years just before the pandemic.

In some regions, supply is much tighter than normal – especially in parts of the Northeast and Midwest, where new construction has lagged and many owners are staying put. On the flip side, parts of the South and West have seen inventory bounce back strongly, even surpassing pre-2020 levels in a few markets (thanks in part to lots of new home building).

For example, places like Las Vegas, Raleigh, and Austin have significantly more inventory than a year ago, which has cooled down competition there. But in areas like New York or Chicago, the market still feels quite tight by historical standards.

On a national level, we currently have about 4.5 months of supply at the current sales pace – a huge improvement from the crazy 1-2 months’ supply during the height of the boom. A balanced market is often defined around 5-6 months, so we’re much closer to equilibrium now than we’ve been in years.

This shift toward balance means neither buyers nor sellers have a decisive upper hand universally; it really depends on local conditions and how well a property is priced. We’re in a transitional market where having current data and local insight is gold for agents.

Notably, new construction is playing a growing role in the inventory story. Homebuilders have been ramping up production in many areas, and newly built homes now make up a larger chunk of what’s for sale.

Builders are facing the same affordability-challenged buyers, so many have responded by offering incentives and competitive pricing. In fact, roughly 37% of builders cut prices in June to attract buyers – the highest share of price-cutting seen in recent years. It’s not necessarily that builders are panicking. Rather, they recognize the need to meet buyers halfway, given high mortgage rates. This means opportunities for buyers (and their agents):

• Purchasing a new home might come with perks like mortgage rate buydowns
• Free upgrades
• Cash toward closing costs

For any buyers frustrated with the limited choices in the resale market, it’s wise to also explore new homes – many builders are paying commissions to buyer’s agents and are eager to work with you.

More inventory is largely good news. Buyers you represent will have an easier time finding suitable homes, and you won’t have to jump on a new listing within hours quite as often. Encourage your buyers to keep an open mind – with more listings, they might find a gem that checks their boxes without having to stretch their budget as much.

For sellers, increased inventory means more competition, so their home needs to stand out to get top dollar. This is where your guidance on staging, pricing, and marketing is invaluable. It’s also smart to watch local inventory trends closely. Real estate is hyper-local, and national trends might not mirror what’s happening in your town. If inventory is climbing in your market, counsel sellers that the days of naming their price and getting it are fading, and speed is no longer guaranteed – but also remind buyers that even with more listings, nice homes that are well-priced can still go quickly. In short, manage expectations on both sides.

Buyer & Seller Activity

Buyer activity remains somewhat lukewarm by historical standards, but there are hints of pent-up demand poised to emerge when conditions improve. Many buyers took a “wait and see” approach earlier this year as rates rose, but as they’ve adjusted to the reality of 6-7% mortgages, some are re-entering the market, hoping to take advantage of the increased inventory and slightly less competition. Mortgage application data has been choppy week-to-week (spiking when rates dip, and slowing when rates bump up again), which tells us buyers are rate-sensitive but still watching the market closely.

If a buyer is well-qualified and motivated today, they actually have a better shot at securing a home than at any time in the last few years – that’s a message we can share with those on the fence. In fact, recent surveys show buyer sentiment is improving from the extreme pessimism of 2022. As of this summer, about one in four consumers now say it’s a good time to buy a home, which sounds low, but is the highest that sentiment has been in over three years! This uptick suggests that some buyers see opportunity in the cooler market: with flat prices and more choices, the conditions to buy are arguably improving (even if high mortgage rates still make it a challenge).

Seller activity is a mixed bag. New listings are up from last year’s very low levels, but we’re not seeing a flood of sellers by any means. Many homeowners are still reluctant to sell because they don’t want to trade their current 3% mortgage for a 7% one on a new house – a phenomenon often dubbed the “golden handcuffs” of low rates. Those who are listing their homes in 2025 tend to be people who need to move (due to job relocation, family changes, etc.), or those who sat out the craziness of 2021-2022 and are now cautiously testing the waters. Overall, seller confidence is improving slightly. About 61% of surveyed consumers think it’s a good time to sell (up from the low points last year), but that’s still more subdued than the almost 80% who felt that way during the height of the seller’s market.

What we’re clearly seeing is that sellers can’t call all the shots anymore. They actually have to compete for buyers’ attention again. Price reductions are one tool – and as noted, are happening more frequently. Another trend is sellers (and builders) offering concessions. It might be covering a buyer’s closing costs, offering a credit for repairs, or even buying down the buyer’s mortgage rate for the first couple of years. These tactics are making a comeback.

• If you’re representing buyers, remember to ask for reasonable concessions. You might get them!
• And if you’re representing a seller, consider how sweetening the deal (or at least being flexible on terms) could attract an offer in a cooling market.

In 2025, both buyers and sellers are a bit cautious, but many are also serious – the tire-kickers have mostly stepped back. Every buyer and seller lead may require more nurturing and education than in years past. Buyers may need extra encouragement and factual data (like affordability calculators or local market stats) to feel confident it’s okay to buy in a high-rate environment.

Sellers may need to be shown comparative listings and recent sales to truly grasp that today’s market isn’t yesterday’s – even if their neighbor sold in 3 days last summer, that might not be the case now.

TLDR

The national housing landscape in late July 2025 is one of cautious equilibrium. While high mortgage rates cast a shadow, there’s a sense that the market is normalizing in a healthy way. Buyers have more breathing room and negotiating power than they’ve had in years, which is a welcome change for your home-shoppers (even if it comes with the trade-off of higher financing costs). Sellers can still achieve very strong prices – in many cases the highest ever – but they have to earn it with the right pricing and a well-prepared listing. Homes aren’t selling themselves anymore. It’s the skill and knowledge of real estate professionals that make the difference between a listing that languishes and one that sells.

Sources

1. National Association of REALTORS® – Existing-Home Sales Report, June 23, 2025 (May 2025 data)
2. Realtor.com Research – June 2025 Monthly Housing Market Trends Report (Inventory, listing price, and market metrics)
3. Freddie Mac – Primary Mortgage Market Survey (Weekly Average Rates), July 17, 2025 release
4. Fannie Mae – Home Purchase Sentiment Index, May 2025 Data (consumer housing sentiment)
5. Mortgage Bankers Association – Weekly Mortgage Applications Survey, July 2025 (buyer demand signals)
6. National Association of Home Builders – Housing Market Index (Builder Confidence), July 2025 and June 2025 data on new home pricing incentives. Additional link here.