T
he housing market is a hot topic as 2025 approaches, and the National Association of REALTORS® (NAR) has a clear view on what to expect. Chief Economist Lawrence Yun notes that, although sales have been sluggish, falling mortgage rates and a growing inventory signal a brighter outlook for the coming year.
**Why the slowdown?**
High borrowing costs and a tight supply have kept buyers on the sidelines. Think of a library with only a few books—finding a home feels similarly difficult. But rates are easing, and more listings are appearing, creating a more balanced market.
**Yun’s 2025 forecast**
- **Sales rise**: Lower rates and more inventory should lift home sales throughout the year.
- **Wealth‑driven upgrades**: Homeowners with increased equity and a booming stock market are poised to trade up, fueling activity in the higher‑end segment.
- **Affordability gap**: Starter homes remain scarce, so buyers in the lower price range still face challenges despite cheaper rates.
**Midwest as a magnet**
The Midwest has emerged as the most attractive region, with median prices 22 % below the national average. Its affordability draws buyers who might otherwise be priced out elsewhere, and the expected market improvements could amplify interest here.
**August 2025 snapshot (NAR Existing‑Home Sales Report)**
- **Sales**: Slight month‑over‑month dip (‑0.2 %) but a 1.8 % year‑over‑year gain, totaling 4.0 million units annually.
- **Inventory**: Up 11.7 % YoY to 1.53 million units, a 4.6‑month supply—more options for buyers.
- **Median price**: $422,600, up 2 % YoY.
- **Single‑family homes**: MoM down 0.3 % but YoY up 2.5 %; median price +1.9 % to $427,800.
- **Condos**: MoM flat, YoY down 5.1 %; median price +0.6 % to $366,800.
- **Regional trends**: Northeast sales fell both MoM and YoY, prices rose 6.2 %; Midwest sales grew MoM and YoY, prices up 4.5 %; South saw a YoY increase of 3.4 % despite a MoM decline; West had a modest MoM rise but a YoY drop, with prices up 0.6 %.
- **Market dynamics**: Median days on market 31 (up from 28), first‑time buyers 28 % of sales, cash transactions 28 %, investor purchases 21 %, distressed sales 2 %.
- **Mortgage rates**: 30‑year fixed at 6.59 %, down from 6.72 % in July and close to last year’s 6.50 %.
**What this means for 2025**
- **Buyers**: More inventory and easing rates give them leverage; bidding wars should ease outside the hottest markets.
- **Sellers**: Competitive pricing and presentation remain key; well‑maintained homes still sell, but overpricing can stall sales.
- **Affordability**: The Midwest will likely see sustained demand; buyers in pricier regions may need creative financing or consider secondary markets.
- **Trade‑up segment**: Homeowners with strong equity will drive a significant portion of sales, seeking larger or more luxurious properties.
Overall, Yun’s analysis suggests a market that is healing and stabilizing, moving away from extreme price swings toward a more balanced, accessible environment for both buyers and sellers.
**Investing opportunity**
For those looking to expand a real‑estate portfolio, high‑quality, ready‑to‑rent properties in top U.S. markets offer consistent returns. Contact Norada’s investment counselors at (800) 611‑3060 to explore options and grow your holdings with confidence.
