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s we navigate the second half of 2025, the housing market is showing signs of stabilization and growth in certain areas. According to Norada Real Estate's analysis, the first six months of 2025 have provided a fascinating glimpse into the forces at play in our housing market. Fluctuations reflect broader economic conditions, mortgage rate movements, and evolving buyer and seller sentiment.
January 2025 saw existing-home sales dip by 4.9% due to mortgage rates averaging 6.76%. However, sales were still up 2% compared to the previous year, indicating that many buyers adapted to higher borrowing costs. The median home price climbed by 4.8% year-over-year to $396,900.
February's rebound saw existing-home sales climb 4.2% month-over-month, but trailed the year-ago pace by 1.2%. Mortgage rates averaged 6.96%, demonstrating their dominant factor in shopper decisions. The median home price continued its upward trend, growing 3.8% year-over-year.
March brought a concerning trend with existing-home sales falling sharply by 5.9% from February. The annual rate was 4.02 million, down 2.4% from the previous year. Mortgage rates had recently climbed, and a Presidential tariff announcement created economic jitters. Inventory saw a significant jump, up 19.8% from the previous year.
April's slowdown continued with existing-home sales dropping another 0.5% from March. The total supply of homes for sale jumped to a five-year high of 1.45 million, up 21% from the previous year. Mortgage rates hovered around 6.73%.
May saw sales remain sluggish, inching up only 0.8% month-over-month. The median sales price hit a new record for May at $422,800, up 1.3% year-over-year. Inventory continued to grow, sitting at 1.54 million units, up 20.3% from the previous year.
June concluded the first half with a 2.7% decrease in existing-home sales month-over-month, landing at a seasonally adjusted annual rate of 3.93 million. Year-over-year, sales were actually unchanged. Inventory saw a slight dip to 1.53 million units, representing a 4.7-month supply.
Looking ahead, Norada Real Estate's analysis suggests the following trends for the remainder of 2025:
1. Mortgage Rates: A slow and steady decline is expected, with rates averaging 6.4% in the second half.
2. Home Sales: A flicker of recovery is anticipated, with existing-home sales rising by 6% in 2025.
3. Home Prices: Continued growth, but at a slower pace, with a modest 3% rise in median home prices for 2025.
4. Inventory: A buyer's best friend, with inventory levels expected to continue growing, offering buyers more options and time to make decisions.
5. Regional Variations: The divergence continues, with clear differences in market performance across the country.
The key levers that will shape the remainder of 2025 are mortgage rate stability/decline, inflation and economic stability, and inventory levels. Understanding these trends is crucial for making sound real estate decisions. At Norada Real Estate, we believe that this period presents an opportune moment to enter the market, provided buyers maintain financial discipline.
