What’s Really Happening in the Housing Market?
As we head into the spring season—a historically more active time for real estate—market conditions are starting to shift in interesting ways. While home sales remain relatively steady compared to last year, new data reveals deeper changes that could reshape the housing landscape for both buyers and sellers in 2025.
Let’s break it all down and explore what’s really happening in today’s market.
In February 2025, home sales totaled 4.26 million—a slight dip from 4.38 million sales in February 2024. While this decrease may seem minimal, it’s a signal that the red-hot pace of previous years has cooled slightly. However, it’s important to note that this seasonal slowdown is common during the winter months, and activity is expected to pick up as we enter spring.
The real headline lies in inventory. February 2025 saw 1.24 million homes on the market compared to just 1.06 million in February 2024—a notable increase of nearly 18%. This trend means buyers have more choices, and sellers may need to recalibrate their pricing or marketing strategies.
On top of that, March 2025 brought over 10% more new listings than March of last year, which could indicate that sellers are coming to terms with the reality of today’s mortgage rates and choosing to list rather than wait.
The boost in inventory is starting to shift leverage from sellers to buyers. In recent years, sellers enjoyed bidding wars and quick sales. Now, with more homes on the market, buyers are gaining more negotiating power—whether it’s on price, closing costs, or contingencies.
This balance may not flip entirely, but we're certainly seeing signs that the ultra-competitive seller's market is softening into a more level playing field.
Here’s something unexpected: while both interest rates and median home prices ticked up slightly—by just under 4%—median monthly principal and interest (P&I) payments actually decreased by nearly 5%. How is that possible?
It’s likely due to a wave of refinancing from homeowners who locked in at higher rates in late 2023 and then took advantage of slightly lower rates more recently. This refinancing activity gave many homeowners a bit of extra breathing room—about $100 more in their pocket each month. In today’s uncertain economic climate, that extra cash can make a meaningful difference.
As expected, the Federal Reserve decided to hold the federal funds rate steady during its latest FOMC meeting. They’ve also signaled that there’s no rush to make drastic cuts. This consistency gives the market some stability, even if it dashes hopes of dramatically lower rates in the near future.
Additionally, the Fed continues to offload mortgage-backed securities, keeping the pressure on long-term rates but showing confidence in the market’s ability to stand on its own.
The biggest takeaway? Real estate remains highly local. National trends give us insight, but your neighborhood, city, or region may be telling a different story altogether.
If you’re thinking about buying, now may be a smart time to act—before more competition returns in full force this spring and summer. If you’re a seller, understanding what today’s buyers are looking for (and pricing competitively) is key.
While home sales have remained mostly stable, the increase in inventory and the refusal of mortgage rates to drop significantly are reshaping the market dynamic. Buyers are gaining more options and, slowly, more leverage. Sellers, on the other hand, are starting to realize that waiting for lower rates might not be a viable strategy anymore.
The market is still very active—but it’s also evolving. Want to know what this means for your local area? I’d be happy to walk you through the latest updates specific to your neighborhood.
Let’s chat and make sure you’re prepared to navigate this next chapter of the real estate market with confidence.
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