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The Shifting US Housing Landscape: Balancing Buyers and Sellers in 2025

The Shifting US Housing Landscape: Balancing Buyers and Sellers in 2025

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The US housing industry has entered July 2025 with signs of cautious optimism and transition. Over the past 48 hours, industry data and expert commentary confirm that while the pandemic-era boom is over, the market is shifting toward greater balance between buyers and sellers.

A major development is the recent and notable drop in mortgage rates. The average 30-year fixed mortgage rate now stands at 6.67 percent, its lowest since April, after falling for five consecutive weeks. This marks a 0.28 percent decrease from a year ago and reflects a broader decline in Treasury yields that guide home loan pricing. This drop has spurred a modest rise in mortgage applications—up 2.7 percent last week—and pending home sales increased 1.8 percent in May, foreshadowing potential gains in completed sales in the weeks ahead. However, overall home sales remain well below pre-pandemic levels, and last year saw the lowest number of previously occupied home sales in nearly 30 years.

Inventory levels are rising across much of the nation, providing buyers more choices and leverage. The US had a months supply of 4.4 in May, nearing the threshold of a buyer's market, typically marked by six months supply. Selective price reductions are now more common, and June saw the largest decline in home sales in four months with pending sales down 3.2 percent and new listings retreating for the first time in six months. Despite this, home prices reached an all-time median high of $400,125 this week, up 1.4 percent from a year ago, continuing to challenge affordability.

Industry leaders like Berkshire Hathaway are advising home buyers to temper expectations for a dramatic drop in prices or mortgage rates, noting that conditions of five years ago are unlikely to return soon. While no major deals or regulatory changes have been announced this week, the market is expected to remain in a state of gradual reset for the rest of the year.

In summary, while the US housing market is not yet a buyer’s market, it is the most buyer-friendly it has been in nearly a decade, with rising inventory, slower price growth, and slightly improving financing conditions, though affordability remains a key hurdle.

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