What’s Happening in the Housing Market This Summer
The housing market is showing signs of normalization after years of rapid growth. For June 2025, median home sale prices grew by just 1.97% year-over-year, a pace that is much closer to inflation levels than what we’ve seen in recent history. This shift may come as welcome news for buyers who’ve been navigating affordability challenges and a competitive market for the past few years.
Let’s break down the latest updates on prices, inventory, and mortgage rates—and what they could mean for buyers and sellers in the months ahead.
In the past, home price appreciation often soared far above inflation. Today, however, the market looks more balanced. With June’s 1.97% increase in median sales prices compared to last year, the housing market is tracking more closely with the 2.7% inflation rate reported by the Consumer Price Index (CPI).
This moderation suggests that buyers may finally be catching a break from the relentless pace of price growth. For the market as a whole, steadier growth is healthier and more sustainable in the long term.
June brought another month of expanding inventory. Nationally, listings rose 15.91% year-over-year, signaling that more homes are hitting the market than new buyers are stepping in.
While existing home sales ticked up 0.77% year-over-year, new listings surged 7.25%, creating more choices for buyers. This influx of supply means buyers may have more time to make decisions, more properties to compare, and potentially more negotiating power—especially as sellers begin to compete more aggressively for attention.
Despite calls for rate cuts, the Federal Reserve kept interest rates unchanged in June, largely due to ongoing concerns about recently enacted tariff policies and their potential economic impact. While inflation appears under control and unemployment remains historically low, the Fed is prioritizing caution.
Analysts do expect the Fed to eventually move toward rate cuts, possibly as early as September, but for now, officials are signaling patience.
Mortgage rates remain stuck in the mid-to-high 6% range. While not rising further, they continue to be a major hurdle for both buyers and sellers. Many homeowners who locked in ultra-low rates between 2–4% in prior years are hesitant to sell, knowing they’d face a much higher rate on their next purchase.
This “rate lock” effect has reduced mobility, creating a market where supply outpaces demand. Still, if the Fed signals upcoming cuts later this year, we may see buyers re-enter the market more confidently.
The national housing market is cooling into a more balanced state, with modest price appreciation, growing inventory, and steady but high mortgage rates. For buyers, this environment offers more opportunities, time to compare, and less pressure than in recent years. For sellers, pricing competitively and preparing a home to stand out is more important than ever.
While these trends provide valuable context, real estate is highly local. California—and San Diego in particular—often follows its own path, so staying informed about neighborhood-level data is essential. Partnering with a knowledgeable local real estate professional can help you navigate the market with confidence, whether you’re planning to buy or sell.
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