Real Estate Rundown August 2025
August 01, 2025
Photo Courtesy of Blake Wheeler via Unsplash
Sellers Hope For Boost in Market Before Fall
The summer housing market has been cooler than usual, with sellers hoping for a late-season rebound as high homeownership costs continue to sideline buyers. Active inventory jumped 23.7% year over year, marking the 90th straight week of growth and the highest level since 2019, yet homes are sitting on the market longer, and new listings continue to rise. Despite a slight dip in mortgage rates to 6.72%, demand remains sluggish, pushing more sellers to reduce prices or delist entirely. The median list price held steady year over year for the first time since May, though price-per-square-foot continued to inch upward, suggesting a shift toward smaller, more affordable homes. Economists say price cuts, while tough for sellers, may help re-engage buyers and keep inventory moving.
Rates Holding Steady, For Now
At its July meeting, the Federal Reserve held interest rates steady, with two officials dissenting—a rare occurrence that highlights the current economic uncertainty. While no surprises emerged, attention now shifts to the September 17 meeting, where a rate cut is possible but hinges on signs of labor market weakening in the next two jobs reports. Fed Chair Jerome Powell emphasized a data-dependent approach, noting that inflation risks from tariffs remain, but a deteriorating labor market could justify a cut. With futures markets pricing in a 50% chance of a September cut, mortgage rates are expected to remain flat in the short term but could shift significantly depending on upcoming employment data.
New Home Sales Stall
New single-family home sales rose slightly in June to a seasonally adjusted annual rate of 627,000, up 0.6% from May but still 6.6% below last year’s pace. The median sale price dropped to $401,800—the lowest of the year—while inventory climbed to a 9.8-month supply, the highest since last June. Builders are increasingly responding to soft demand with price cuts and incentives, though the size of discounts has remained steady, averaging 5%. Despite these efforts, sales remain sluggish outside the more affordable Midwest region, and continued price reductions may be necessary to boost affordability and meet or surpass 2024 sales levels.
Buyers Are Not in A Rush -Yet
Pending home sales declined 0.8% in June and are down 2.8% year-over-year, despite a 16% annual increase in housing inventory, according to the National Association of REALTORS®. While buyers now have more options, affordability remains a barrier, keeping many on the sidelines. However, rising mortgage applications and strong job growth suggest pent-up demand could soon translate into more activity—especially if mortgage rates begin to fall. The Northeast stood out as the only region with a month-over-month increase in contract signings, even as it posted the strongest price growth nationwide. Meanwhile, existing-home prices hit a record $435,300 in June, and homeowner equity continues to climb, reinforcing the divide between current owners and sidelined buyers.
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