🏠 Mild Seller’s Market Under Pressure as Inventory Grows

What Rising Inventory & Mortgage Rates Mean for Buyers & Sellers in 2025

The U.S. housing market is shifting again—and if you're planning to buy or sell this year, it's essential to stay informed. According to the latest housing report from the National Association of Realtors (NAR), we’re still in a mild seller’s market, but growing inventory and fluctuating mortgage rates are putting pressure on that status. Here's what you need to know.

🔎 What's the Market Doing Right Now?

Existing home sales are currently tracking at 4 million per year, a pace that still lags behind pre-pandemic levels. In April, sales of existing homes dropped by 0.5%, and total residential transactions fell by 2% compared to the same time last year.

Yet, despite softer sales activity, home prices continue to rise. The median price of an existing home is now $414,000, up 1.8% from last year. This marks the 22nd consecutive month of price growth—a sign that values remain resilient even in a slower market.

📈 Inventory is Climbing

One of the most notable shifts is the increase in inventory. Based on the current pace of sales, there's now 4.4 months of housing supply—the highest since 2020. While this gives buyers more options and negotiation power, it also signals that sellers need to be strategic in their pricing and presentation.

💸 Mortgage Rates: Still a Wild Card

Many buyers are holding out for more favorable mortgage rates. Although the average 30-year fixed rate dipped slightly to 6.81% in mid-May (down from 7.02% last year), it’s not the substantial drop experts believe is needed to truly reenergize demand.

The Federal Reserve has held the cash rate at 4.5% since December, and while the White House has urged rate cuts, no change has been made—yet.

🧍 First-Time Buyers Still Showing Up

Despite economic uncertainty, first-time buyers accounted for 34% of home sales in April. That’s encouraging for sellers with starter homes, but also a reminder that affordability and financing options remain top-of-mind for many. If you're a first-time buyer, check out this First-Time Homebuyer Guide to prepare with confidence.

⏳ Homes Are Sitting Longer

Another signal of shifting dynamics: the average home is taking 29 days to sell, which is up three days from the same time last year. This slight delay could be the difference between bidding wars and price reductions.

📉 Pending Sales Suggest a Slowdown

NAR’s Pending Home Sales Index (PHSI) dropped 6.3% in April and 2.5% year-over-year, indicating a likely backup in inventory over the coming months.

🧠 Expert Insight

NAR Chief Economist Lawrence Yun notes:

“At the macro level, we are still in a mild seller’s market. With the highest inventory levels in nearly five years, consumers are in a better situation to negotiate.”

He adds that a “meaningful decline in mortgage rates” will be key to reactivating buyer momentum in 2025.

💬 What This Means for You

Whether you're a buyer or a seller, the market is presenting unique opportunities. Sellers can still benefit from rising values but may need to adjust expectations. Buyers may find more options and leverage—but should act quickly when mortgage rates dip.

✅ Ready to Navigate This Market?

As local real estate experts, we’re here to guide you every step of the way. From pricing strategies to buyer financing support, we’ll help you make informed decisions in today’s evolving market.

📩 Contact us today to discuss your next move.
📱 Schedule a consultation or call us at (915) 228-3989.