The mid-May 2025 housing market is serving up a classic spring mix—bustling activity, cautious optimism, and a whole lot of balancing. This is traditionally one of the busiest times of the year for real estate, and that trend is holding strong in many areas across the country.
But while the energy is high, agents and clients alike are navigating a few challenges that continue to shape the pace of deals.
🏡 More Inventory Options, Still Might Not Be Enough
Let’s start with the good news: inventory is finally improving. According to Homes for Heroes, active listings have increased significantly (20% YoY) compared to this time last year, giving buyers more options than they’ve had in quite a while.
For many would-be homeowners, that’s a sigh of relief after years of slim pickings and lightning-fast bidding wars. But before we celebrate a total turnaround, it’s worth noting: we’re still not back to pre-pandemic levels.
Many homeowners are hanging onto their homes (and their ultra-low mortgage rates), choosing to stay put instead of trading up and taking on a new loan at nearly double the rate they locked in a few years ago.
That “rate lock-in effect” continues to slow down potential new listings—especially in move-up buyer markets.
💰 Mortgage Rates Higher, But Stabilizing
Rates continue to be one of the biggest conversations in real estate. As of mid-May, the average 30-year fixed mortgage rate is hovering around 6.7%, per Homes for Heroes. That’s a sharp contrast from the sub-3% rates buyers were scoring during the height of the pandemic, and it’s enough to give some buyers pause—especially first-timers.
That said, there’s a growing sense that buyers are adjusting. Many now accept that we’re not going back to 2.75% anytime soon, and those who are financially ready are moving forward anyway—especially with more homes to choose from. And in some markets, creative solutions like rate buydowns, seller credits, and assumable loans are helping get deals done.
📊 Pricing Holding Strong
Despite higher rates, home values remain resilient. In fact, the U.S. median existing-home price hit approximately $403,700 in March, according to NAR—a 2.7% increase from the same time last year. That’s great news for sellers who were worried about home values slipping. In many areas, homes are still appreciating, just at a more modest pace compared to the double-digit spikes we saw in 2021 and 2022.
For buyers, this means deals aren’t exactly “cheap,” but many are finding a bit more room to negotiate. Gone are the days of 20-offer bidding wars on every property. Well-priced homes are still moving—often with multiple offers—but listings that are even slightly overpriced are sitting longer and undergoing price cuts.
🔁 The Tempo Is Fast-ish, But Not Frenzied
So what’s the vibe? Busy but balanced. Homes are going under contract, open houses are full, and client phones are ringing—but deals are taking a little longer to come together. Days on market have stretched out slightly, and buyers are being more discerning with their offers.
For agents, this season calls for smart pricing, sharp negotiating, and solid communication. Sellers need to understand the value of realistic pricing, and buyers need to feel educated and confident in what’s likely their biggest purchase.