6 Takeaways from Realtor.com’s 2025 Housing Forecast Update

 

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 If you were holding out hope for a major housing market rebound this year, you might want to recalibrate.

According to the Realtor.com® 2025 Forecast Update, home sales are now projected to drop below 2024’s already low levels. And affordability remains one of the biggest roadblocks for buyers and sellers alike.

Despite more inventory and signs of a more balanced market, buyer demand has not returned to pre-pandemic form. High mortgage rates, stubbornly elevated prices, and a spike in delistings are stalling the momentum many hoped to see by midyear.

Read on for the big takeaways.

#1: Inventory is Up, But Buyers Aren’t Jumping

The housing market is shifting slowly toward balance. Nationwide, the months’ supply of homes for sale has hit 4.6 months, the highest level since 2016. Inventory has also jumped nearly 17% year-over-year, offering more options for buyers who have been on the sidelines.

But more homes on the market haven’t translated into more sales. Danielle Hale, Chief Economist at Realtor.com®, explained:

“Even with more homes on the market, buyer response has remained muted compared to what we’d expect from similar supply shifts in the past.”

This is especially true in the South and West, where inventory gains are strongest, but affordability challenges continue to weigh down demand. In the Northeast and Midwest, inventory remains tighter and buyer activity has held steadier.

#2: Sales Revised Down for 2025

Realtor.com® now expects 4.00 million home sales for the year, 1.5% below 2024’s total of 4.06 million. That would mark the slowest pace since 1996.

Earlier forecasts called for a modest uptick. And while early 2025 showed signs of outperforming expectations, that trend has reversed.

Buyers are being cautious, and many sellers are adjusting, if not pulling back entirely.

#3: Home Prices Still Rising, But More Slowly

Price growth is slowing but not reversing. The 2025 forecast calls for a 2.5% year-over-year increase in existing home sales prices, a noticeable drop from the 4.5% growth seen in 2024.

Listing price declines are most common in metro areas across the South and West, where inventory recovery has been strongest. In contrast, markets in the Northeast and Midwest remain tighter, which could preserve more seller leverage in those regions.

#4: Mortgage Rates Will Remain Elevated

Realtor.com® revised its mortgage rate forecast slightly upward. Rates are expected to average 6.7% in 2025 and drop to 6.4% by year-end. Those numbers are higher than earlier predictions, which pegged average rates closer to 6.3%.

What’s keeping rates high?

  • Investor reaction to the 2024 election and expectations of stronger economic growth and inflation
  • Concerns about tariff-related inflation and expanding national debt tied to the One Big Beautiful Bill Act

#5: Sellers Are Split: Drop the Price or Delist?

In June, more than 1 in 5 listings had a price reduction, and inventory was up nearly 30%. But not every seller is adjusting. Delistings, when a seller pulls their listing without a sale, surged 47% year-over-year through May.

As Hale pointed out,

“If the recent rise in delistings continues or picks up pace, it could interrupt the more buyer-friendly momentum we’ve started to see.”

For agents, this means managing seller expectations is more important than ever. A longer time on market doesn’t always mean a seller is ready to negotiate.

#6: Renting Remains the Easier Path for Many

Renting continues to offer relief for would-be buyers. As of June:

  • Rents have declined for 23 straight months
  • The median asking rent is now 2.7% below its August 2022 peak
  • Renters are saving about $50/month compared to two years ago

This reinforces the idea that many renters are willing to wait for better buying conditions, which may continue to delay the first-time buyer wave agents have been anticipating.

The path to a buyer-friendly market is still in motion, but it’s far from smooth. More listings, higher inventory, and slower price growth all point to better opportunities ahead, but only for those who can act decisively.

Key Details: 

  • Realtor.com’s 2025 Forecast Update projects home sales will fall to 4.00 million, down 1.5% from 2024 and marking the slowest pace since 1996.
  • Inventory is up 16.9% year-over-year, and home prices are expected to rise just 2.5% as affordability challenges persist.
  • Mortgage rates are forecast to average 6.7% for the year, a level that continues to strain buyer budgets and temper demand despite rising inventory.

Sarah Lentz | Jul 23, 2025 | Housing Market

https://nowbam.com/6-takeaways-from-realtor-coms-2025-housing-forecast-update/


@ChuckBarberini - #ChuckBarberiniRealEstate - @ChuckBarberiniRealEstate

@Golden_State_Guide_Service - @Citizen.Number.One



 
 


Location: Martinez, CA 94553, USA

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