The housing market has always been full of twists and turns, but 2025 feels like one of those years where everyone is asking the same question: Are we stuck in a slowdown, or are we quietly setting the stage for a comeback in 2026? With new forecasts from Realtor.com and the National Association of Realtors (NAR), it’s becoming clear that while there’s no quick rebound in sight, there may be something bigger brewing beneath the surface.
Let’s break it down together and take a closer look at what this means, not in numbers alone, but in real terms that impact everyday decisions about buying, selling, or waiting.
What’s Really Happening in 2025
If you’ve been keeping an eye on the headlines, you already know that 2025 isn’t shaping up to be the year of a grand market rebound. Instead, the story feels more like a cautious walk forward, where progress is slow, but there are signs of movement if you look closely. Here are the key points shaping this year’s market.
Inventory Is Rising, but Buyers Are Hesitant
For the first time since 2016, the supply of homes has reached its highest level, with inventory up nearly 17% compared to last year. On paper, that sounds like great news, more homes to choose from should make it easier for buyers. But that’s not the whole story. Many are still holding back, especially in the South and West, where affordability challenges remain a real barrier. In contrast, areas in the Midwest and Northeast are experiencing a bit more stability thanks to tighter inventory.
It feels like the market is offering opportunities, but not everyone is ready to step in just yet. Buyers are cautious, weighing their choices carefully rather than rushing into decisions. For a deeper dive into what this means, you can watch The Barrett Team break it down in their YouTube video here.
Home Sales Are Slowing Down
Both Realtor.com and NAR have downgraded their 2025 sales outlook. Realtor.com expects just 4 million sales, the lowest pace since the mid-1990s. NAR is slightly more optimistic but has still cut its forecast to 4.62 million. Higher interest rates, stubborn inflation, and a slower-than-expected economic recovery are weighing heavily on the market.
The message is clear: 2025 isn’t the year for a dramatic comeback. But there is a silver lining: many experts point to the possibility of a rebound in 2026 if mortgage rates drop meaningfully. In other words, this year may be the pause before the push.
Prices Are Rising, but Slowly
Unlike the sharp jumps we saw in recent years, home prices are cooling off. They’re still rising, but at a slower pace, with a projected growth rate of about 2.5% compared to 4.5% in 2024. This cooling trend is most noticeable in metro areas in the South and West, where supply has surged, leading to more price cuts. Meanwhile, markets in the Northeast and Midwest remain stronger, with tighter inventory keeping values steady.
For anyone considering a move, this uneven growth means one thing: national headlines don’t always tell the story of your neighborhood. Local trends matter more than ever.
Mortgage Rates Remain a Hurdle
Borrowing money is still expensive. Realtor.com now expects 30-year mortgage rates to hover around 6.7% for much of 2025, dipping only slightly by year’s end. Political factors, inflation pressures, and concerns about national debt are all keeping rates higher than many hoped.
For buyers, this means monthly budgets remain stretched. For sellers, it means strategies need to adapt. High rates aren’t just numbers, they directly shape the decisions families make about moving or staying put.
Sellers Are Split on Strategy
Some sellers are adjusting their expectations, dropping prices to attract buyers. In June alone, more than 20% of listings had price cuts. But others are simply taking their homes off the market, leading to a nearly 50% surge in delistings compared to last year.
That tug-of-war creates uncertainty. Just because a house sits on the market longer doesn’t always mean a price drop is coming. Sometimes it just means the seller is willing to wait for conditions to change.
Renting Is Still the Practical Choice for Many
While the buying market feels uncertain, renting has become a more attractive option. Rents have been in decline for nearly two years, down approximately 2.7% from their 2022 peak. That translates into real savings, around $50 a month for many households. For people waiting to see where the market heads, renting offers flexibility without stretching budgets too thin.
So, What Does It All Mean?
2025 isn’t about dramatic swings or instant answers. Instead, it’s a year that asks for patience, strategy, and a focus on what’s happening locally rather than nationally. Rising inventory, slower price growth, and cautious buyers all point to a market that’s still finding its footing. And while the possibility of a stronger rebound in 2026 is on the horizon, navigating 2025 means being thoughtful and intentional about every step.
For anyone in Redding, or anywhere else, this is where having the right guidance makes all the difference. The Barrett Team has been through enough market ups and downs to know that real estate isn’t just about numbers; it’s about people, timing, and strategy. If you’re considering buying, selling, or just weighing your options, this is the perfect time to sit down and map out a plan that fits your needs.
Curious about what these trends mean for your own situation? Reach out to The Barrett Team and let’s talk about what makes sense for you right now.
