The Biggest Challenges for Buyers, Sellers, and Builders in 2025

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The U.S. housing market has entered what Realtor.com’s Jake Krimmel calls an “Anna Karenina market.” In other words, everyone is unhappy in their own way. 

Inventory is up, but sales are down. And from buyers to sellers to builders, no one is thrilled with how this summer has played out.

According to Realtor.com’s latest report, Cruel Summer: Why the US Housing Market is Stuck, the story isn’t about crisis but stagnation. The market is grinding forward in what might as well be neutral gear (a lot like me “learning” to drive a stick shift), and each side of the transaction has its own reasons to be frustrated. 

Buyers: Crushed by the Double Whammy

Affordability remains at near-record lows. The national median list price is hovering around $440,000, virtually unchanged since 2022. But thanks to higher mortgage rates, buying power has eroded. 

Since 2019, the all-in monthly cost of owning a median-priced home with 20% down has risen by more than $1,200. 

That increase is split about evenly between higher prices and higher rates.

As Krimmel pointed out in his report, “Buying a typical home today costs over $1,200 more per month than in 2019.”

Here’s how that breaks down:

Between 2019 and 2021, the median list price rose 18.6%, but monthly payments climbed only 9.2% because rates were so low.

Since 2021, prices are up another 16%, while monthly payments have surged nearly 60% as rates moved higher.

From July 2022 to July 2025, mortgage rates jumped from 5.41% to 6.72%, while the median list price actually fell slightly (from $444,000 to $440,000). The small price drop saves buyers about $23/month, but the higher rate adds $293/month, a net increase of $270/month. 

Granted, the recent drop in rates changes the math, but even in metros where prices have fallen sharply, like Austin (down 14.8% since 2022), today’s monthly mortgage payments remain well above pre-pandemic levels.

Takeaway for agents: More inventory and longer days on market have not translated into real affordability improvements. Until rates ease, many buyers will stay sidelined.

Sellers: Stubborn, Demotivated, or Both

If buyers are frustrated, sellers are stubborn. This is the least seller-friendly summer since Realtor.com began tracking data in 2016. 

Active inventory, new listings, time on market, and price cuts are all up.

More than 1 in 5 sellers have already reduced their list price. Thousands of others are simply pulling their homes off the market. In some metros (Miami, Phoenix, and Riverside), for every 2–3 new listings, one home is being delisted.

Krimmel writes:

“Delisting is a luxury. It’s also a sign sellers are not panicking and the market, despite tepid demand, is far from crashing.”

The delisting trend blunts inventory growth just as the market begins to lean more buyer-friendly. Pending sales are down year-over-year in every month of 2025 so far, and flat national list prices since spring 2022 suggest many sellers are still anchored to peak expectations.

Takeaway for agents: Sellers need clear data on pricing strategy. Delisting might preserve dignity, but it doesn’t move a property.

Builders: Pumping the Brakes

Builders are facing what Krimmel calls a “three-headed monster”: low buyer demand, high financing costs, and tariffs on materials.

Since 2022:

Single-family home starts are down 10%.

New homes under construction are down 15%.

The number of homes sold but not yet started hit an all-time high in June, up 19% year-over-year and 22% since 2022.

July’s residential construction data showed a small pickup in starts, but permits (a forward-looking metric) fell 5.7% year-over-year.

The long-term housing shortage (about 4 million homes nationwide) means demand for new construction isn’t going away. But for now, builders are reluctant to push forward.

Takeaway for agents: Builders pulling back can prolong supply shortages, which keeps pressure on affordability in tight metros.

A Housing Market Divided

National averages hide a split-screen reality. The South and West are saturated with listings, while the Northeast and Midwest remain inventory-starved.

South & West: Inventory is 50–70% above pre-pandemic levels in metros like Austin, Phoenix, Riverside, Miami, Dallas, and Houston. Prices are falling, and homes are spending more than a week longer on market compared to last year.

Northeast & Midwest: Every major metro (New York, Chicago, Boston, Detroit, Philadelphia, Minneapolis, St. Louis) is still below pre-pandemic inventory norms. Homes are selling 1–2 weeks faster than before 2020, and prices remain above 2022 levels.

In other words, there’s too much supply relative to demand in the South and West, and still too little in the Northeast and Midwest.

Key Details: 

• Realtor.com’s August 2025 housing report shows affordability near record lows, with monthly payments on a median-priced home up more than $1,200 since 2019. 
• Sellers are retreating, with over 1 in 5 cutting prices and markets like Miami, Phoenix, and Riverside seeing one delisting for every 2–3 new listings. 
• Builders have also slowed, with single-family starts down 10% and homes under construction down 15% since 2022.

Sarah Lentz | Sep 2, 2025 | Housing Market

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