Published by BiggerPockets | July 12, 2025
After years of limited inventory, rising prices, and affordability constraints, the housing market is finally shifting—and that shift is creating opportunities.
If you’ve been sitting on the sidelines, waiting for the right time to invest in real estate again, this is your signal: The buyer’s market has arrived. After years of limited inventory, rising prices, and affordability constraints, the housing market is finally shifting—and that shift is creating opportunities.
In this month’s housing market update, I’ll break down what’s changing in 2025, why it matters, and how savvy investors can take advantage before the market turns again.
What’s Driving the Market in 2025?
If you had to pick one word to describe the housing market in 2025, it would be inventory. That’s been the defining force behind home prices and sales activity since 2022. And this year, for the first time in a long while, we’re seeing a meaningful increase.
According to Redfin, national inventory is up 15% year over year, which is significant, even if we’re still below pre-pandemic levels. New listings are also up compared to last year, though the rate of increase is slowing. That’s an important signal we’ll come back to later.
The point is this: Supply is finally growing. And that shift is beginning to rebalance the market.
Are There Really No Buyers? The Data Says Otherwise
There’s a narrative floating around that “no one’s buying homes anymore.” But that’s just not true. In fact, demand has quietly been building.
Mortgage purchase applications have now risen for 22 straight weeks, including nine consecutive weeks of double-digit increases. That’s a big deal, especially considering that mortgage rates haven’t dropped meaningfully. Most buyers are still looking at 6.5%+ interest, and yet demand is rising.
This shows us that buyers are adapting. People still need homes, and while affordability remains tight, many are getting creative—buying smaller homes, moving to lower-cost metros, or house hacking to make the numbers work.
Prices Are Holding, but the Trend Is Down
So, what’s the result of rising inventory and increasing buyer activity? Let’s talk prices.
National home prices are up 1.4% year over year, with the median home price sitting at a staggering $441,000. That’s still high, but the trend is clearly downward. A year ago, prices were up 5% annually. Now we’re down to 1.4%, and price growth is below inflation, which is currently around 2.5%.
For leveraged investors, that still means gains in real terms. But for cash buyers or those sitting on nonperforming assets, you’re losing ground to inflation. This is a transitional market, and these are the numbers you need to understand to play it right.
