US Housing Market Update May 2025: Inventory Rises, Prices Moderate, and Affordability Concerns Linger
Failed to add items
Sorry, we are unable to add the item because your shopping cart is already at capacity.
Add to Cart failed.
Please try again later
Add to Wish List failed.
Please try again later
Remove from wishlist failed.
Please try again later
Adding to library failed
Please try again
Follow podcast failed
Please try again
Unfollow podcast failed
Please try again
US Housing Market Update May 2025: Inventory Rises, Prices Moderate, and Affordability Concerns Linger
-
Narrated by:
-
By:
About this listen
The US housing market continues to show mixed signals as we move through May 2025. Recent data indicates that home prices have reached a median of $403,700 in March, marking a modest 2.7% increase from the previous year and setting a new record for the month[3]. This moderate price growth represents a slowdown from 2024's 4.5% appreciation rate[5].
Inventory levels are showing significant improvement, with total housing stock reaching 1.33 million units at the end of March, up 8.1% from February and 19.8% from March 2024[3]. This inventory growth varies by region, with the West experiencing the largest increase at 40.3%, followed by the South at 31.1%[3].
The market is seeing a surge in price cuts as sellers become more realistic about their expectations. According to Zillow's latest data, this trend is creating what economists describe as a "healthier" housing market where the gap between buyers and sellers is narrowing[4].
Mortgage rates remain a key factor affecting market activity, hovering around 6.70%, though potential rate cuts later this year could improve affordability[3]. March's lower rates already boosted pending sales activity by approximately 12% year over year[1].
New construction is playing an increasingly important role, with newly built homes now representing 31.4% of all homes for sale as of February 2025[3]. However, experts at J.P. Morgan suggest that supply should be "less of a support for the housing market in 2025" as new homes for sale have reached 481,000 units, the highest level since 2007[2].
Looking ahead, industry forecasts suggest the market will remain subdued, with price growth expected to average around 2-3% for the remainder of 2025[2][5]. While conditions are gradually becoming more favorable for buyers with increased inventory and moderating prices, the market still faces challenges including elevated mortgage rates and ongoing affordability concerns.
adbl_web_global_use_to_activate_T1_webcro805_stickypopup
No reviews yet