2025 Housing Market Year In Review: Is There Anybody Out There?

13 housing trends that defined another slow year, including record-high house prices, falling mortgage rates, and a gridlocked market 

2025 was a difficult year for the housing market. The affordability crisis continued. The spring and summer homebuying seasons hardly happened. The homeowner population dropped. Buyers remained out of reach, pushing sellers to offer concessions or price cuts. Add in political issues, including tariffs and a government shutdown, and consumers were dealt a difficult hand.

Still, there were some positives. Wages increased faster than housing costs for the first time since 2016, and buyers grew more comfortable with 6% mortgage rates, helping ease the rate-lock issue. 

Regional trends continued, too. The Sun Belt continued its years-long slowdown, while the Rust Belt remained popular.

“This was another unusual year for housing, with a twist,” said Daryl Fairweather, Redfin Chief Economist. “High prices continued to sideline homebuyers, but this year, home sellers followed suit. As the months went by, more sellers pulled their listings in response to weak demand, tightening an already strained housing supply and helping prop up prices. Unfortunately, affordability is unlikely to improve substantially until homebuilding picks up or mortgage rates plummet.”

Below are trends, data points, and visuals that defined the 2025 housing market. 

All data was aggregated from January through November 2025 unless otherwise stated. Data came from Redfin, the U.S. Census Bureau, FRED, NAR, and/or public records. For questions about metrics, read our metrics definitions page.

1. Home prices reached another all-time high

The U.S. median home sale price reached a new all-time high of $446,000 in June. Overall, prices in 2025 remained above last year’s then-record levels, with every month surpassing the corresponding median sale price from 2024.

When averaging for the entire year, 2025’s median sale price was 1.7% higher than 2024—around $7,400.

Affordability remained a major issue for buyers and sellers, especially as tariffs, inflation, and elevated mortgage rates impacted the economy. The Trump Administration has stated that prices will drop in the near future, but economists and consumers are wary. The affordability crisis is accelerating the fastest in rural America, where buyers need to earn nearly twice as much as they did before the pandemic to afford a typical home.

Luxury prices also spiked in Sun Belt metros like West Palm Beach, helping redefine the upper end of the housing market as wealthy buyers flock south.

2. San Jose was the most expensive metro area for homebuyers in 2025

Taking the top spot for the second year in a row, San Jose was the most expensive major metropolitan area for homebuyers in 2025. The median sale price in San Jose averaged $1,617,659, up 3.3% ($51,000) from last year. The metro hit a price peak of $1,700,000 in April, which was $100,000 more than second-place San Francisco.

• The top six most expensive metros were all in California
• House prices generally rose across the board, with Cleveland (9.2%), Pittsburgh (7.1%), and Milwaukee (7.1%) posting the largest annual increases.

The top five most expensive metros to buy a home

3. Detroit was the most affordable metro area for homebuyers in 2025

Once again, Detroit topped the list as the most affordable major metropolitan area for homebuyers in 2025. The median sale price in Detroit averaged $202,739, up 6.2% (~$12,000) from last year. Even so, the area hit a record high in July, when prices reached $217,000.

Detroit has been the most affordable major metro for years, with prices consistently less than half the national average. Even when you zoom in on individual cities, Detroit remains cheapest: The average median price for the city proper was $92,303. 

However, many locals still struggle to afford it. Detroit has one of the highest poverty rates and lowest median household incomes in the country, exacerbating existing inequalities and making housing harder to find for underrepresented groups. Prices have been rising faster than the national rate since mid-2024, too, which has added to the pressure.

• The vast majority of low-cost cities are in the Rust Belt, where incomes are lower, homes are older, competition is higher, and prices are rising fastest. 
• Prices dropped the fastest in Sun Belt metros, with Jacksonville (-3.1%), Oakland (-2.7%), and Dallas (-2.2%) posting the largest annual decreases. 

The top five most affordable metros to buy a home

4. Home sales remained historically slow

An average of 424,078 homes were sold every month in 2025, similar to last year but far below the 2020 rate, when 585,000 homes sold every month. When looking at just existing home sales, Redfin expects there to be about 4.24 million in 2025—on the lowest end of the 4-6 million average and in line with 2023 and 2024. Note that home sales are seasonally adjusted.

Year-over-year home sales were mostly flat, but sunk heading into 2026. In 2024, home sales increased because buyers accepted that mortgage rates would remain elevated, but that optimism dropped this year as prices kept rising and economic uncertainty rose.

This slowdown affected all corners of the market, including luxury. High-end home sales fell to their lowest level since at least 2013. 

• The month of May had the fewest home sales, at 416,400. 
• Home sales increased across much of the Rust Belt and South, while Florida’s slowdown persisted.
• Ultra-luxury homes still changed hands at a normal pace, as wealthy buyers were better insulated from economic pressures.

The top five metros where sales dropped the most

5. Mortgage rates steadily dropped throughout the year

“Mortgage rates again played a large role in quieting the housing market this year, but with notable improvements,” noted Fairweather. “Rates averaged 6.6% in 2025, compared to 6.7% last year. While this didn’t bring many buyers out of the woodwork, it did bring costs down, which we expect to only improve in the coming years.” 

Zooming out, weekly average 30-year rates fell nearly an entire percentage point from their high of 7.16% in January to their low of 6.19% in October, before evening out at ~6.3% to close out the year. Technically, 2024’s rates dipped slightly lower (6.14%), but 2025 saw more consistent relief.

Zooming in, though, mortgage rates were fairly volatile, with some days seeing large shifts in anticipation of tariff announcements, economic reports, or Federal Reserve (Fed) meetings. The government shutdown added a layer of uncertainty, too.

Redfin predicts that mortgage rates will average 6.3% in 2026.

6. Housing inventory increased substantially—with a catch

On average, 1.48 million homes were listed for sale or pending every month in 2025, up an astonishing 18.3% from last year. Monthly inventory peaked at 1.63 million in July.

However, as the year went on, inventory growth slowed as sellers realized they couldn’t get the prices they hoped for and buyers became harder to come by. 

Starter homes were a different story. Starter-home listings—those in the 5%-35% price tiers—actually rose alongside sales. Consequently, prices increased quickly: In some metros, a starter home now costs $1 million.

• Housing inventory rose the most in the Sun Belt and pricey coastal metros, where buyers were in charge. Inventory fell in the most competitive cities, clustered in the Rust Belt.

The top five metros where inventory increased the most

The top five metros where inventory decreased or rose the slowest

7. Months of supply reached a recent high

While inventory measures the number of homes currently available for sale, months of supply measures the amount of time it would take those homes to sell at the current rate of sales. Four to five months of housing supply is considered a balanced market, with more indicating a buyer’s market and less indicating a seller’s market. 

The average stock of housing supply across every month in 2025 was 3.5 months, up from 3 months last year. 

But as buyers stepped back later in the year, more sellers decided to hold off on listing their home altogether, pushing supply back down. It remained a strong but unusual buyer’s market, where costs were high but competition was low. Through the first eight months of the year, just 2.8% of the nation’s homes changed hands—a marginal improvement over last year’s low. 

That said, conditions varied sharply by region. In some cities, buyers had to fight for every home. Cities in Upstate New York and the Bay Area were red-hot, often selling within two weeks.

8. New listings jumped nearly 7%

In line with inventory, new listings made major gains this year. An average of 565,578 homes were listed every month, up 6.8% from last year and well above 2023’s record low. New listings have consistently improved over the past three years.

These listings translated to slightly more sales, but high prices kept most buyers on the sidelines. Plus, as sellers became more skittish later in the year, new listings dropped significantly. Supply improved, but end-of-year trends pointed towards a tighter market.

9. New construction continued to lag

The U.S. saw an average of 1.38 million new homes started monthly in 2025, unchanged from 2024 and down from 1.42 million in 2023. 

According to most experts, the largest contributor to the U.S. housing crisis is a lack of home building. There just aren’t enough homes for people who want them. The deficit changes from source to source, but most estimates range from two to six million units. 

Building plummeted during the Great Recession but saw a small resurgence during the pandemic, particularly in disaster-prone areas. However, construction began losing steam in 2022, and 2025 continued the decline. The slowdown has largely been due to low buyer demand and higher development costs, leaving many builders focused on selling existing inventory.

The housing shortage gets worse when you look at affordable housing (which includes rentals). Nationwide, there is a shortfall of 7.1 million homes, with zero states meeting their affordable housing needs.

Still, there are signs of optimism. “The current market is discouraging, but there is reason to hope,” reassured Chen Zhao, Redfin’s Head of Economics Research. “Policymakers and voters have made it clear that improving affordability is a top priority, primarily by building more low-cost homes. Multiple bipartisan bills aimed at doing just that are making their way through the government, which could influence development in 2026.”

• Housing completions fared better than housing starts, with an annualized rate of 1.6 million new homes finished as of August (the most recent data available).
• Permits to build new housing fell this year, reversing course from last year but in line with their post-pandemic slump.

10. Inflation crept back up as economic uncertainty simmered

Inflation was key to the economy in 2025, as President Trump enacted policies including tariffs, a new spending bill, and immigration crackdowns—actions that many economists view as inflationary. In fact, a report found that inflation could have dropped by about one-third if it weren’t for tariffs.

Inflation remained well above the Fed’s 2% target, generally averaging around 2.7%. The Fed cut interest rates three times but remained cautious amid economic and job market uncertainty.

The rise of AI also played a large role in the economy. As AI investment ramped up, which fueled essentially all of the year’s stock market gains, fears of an AI-bubble grew louder.

11. The typical home took over a month and a half to sell

Homes spent an average of 48.5 days on the market in 2025—nearly six days longer than last year and the longest since the pandemic. Sales continued their dramatic decline from the record-breaking pace seen in 2021. 

Even so, by historical standards, homes sold relatively quickly. In 2012, the typical home sat on the market for 80–90 days before selling.

The slowdown was especially visible in September, when 70% of all listings nationwide had sat on the market for more than 60 days (called a “stale” listing). Former pandemic boomtowns like Miami, FL (84.6%) and Austin, TX (82.8%) saw even higher shares of stale listings, demonstrating how much they have slowed. 

Time on market varied widely by region, with Rust Belt metros seeing very fast sales and Sun Belt metros easing further.

• Delistings, where a seller removes their home from the market, remained elevated due to limited demand. 
• Austin became the strongest buyer’s market later in the year, with nearly twice as many home sellers as buyers. 

The top five metros where homes sold the fastest

The top five metros where homes sold the slowest

12. All-cash purchases remained at historic highs

30% of homes were purchased entirely with cash in 2025—down from 31% last year but still well above pre-pandemic levels. 

All-cash sales generally follow the same trend as the rise and fall of mortgage rates: When rates move down, the percentage of all-cash sales moves down; when rates go up, all cash-sales go up. So, as mortgage rates skyrocketed in 2022, all-cash purchases followed suit. They have remained elevated since, but are falling as mortgage rates drop and economic uncertainty rises.

Luxury buyers and investors were much more likely to pay in cash, which helped them bypass interest rates altogether and secure a better deal. All-cash payments were largest in California, where housing is the most expensive, and most popular in Florida and the Rust Belt.

The top five metros with the highest share of all-cash purchases in 2025

Data is from a Redfin analysis of county records across 40 of the most populous U.S. metropolitan areas, dating back through 2011.

13. Investor activity was flat, but still well above pre-pandemic levels

Real estate investors purchased an average of 18% of all homes in 2025—unchanged from 2024 but trending downward. Activity varied by region, with some of the largest pullbacks in parts of Florida, particularly in the condo market. 

Compared to the blistering pace investors set in 2021-2022, this year was relatively calm. Investor market share had already dropped in 2023 as higher borrowing costs and prices curbed consumer demand, and it hasn’t rebounded since. 

Even so, investor market share remains far above historical norms. In 2015, investors owned around 15% of homes, and in 2000, their share was just 7%. 

The top five metros with the highest investor market share in 2025

Data was analyzed on a quarterly basis and includes all property types unless otherwise stated. Data is through September (Q3). Metro-level data measured 40 of the most populous U.S. metropolitan areas. 

Looking forward

The 2025 housing market was another difficult one for many homebuyers and sellers, but what does Redfin predict for 2026? Read our 2026 Housing Market Predictions to learn more.

The post 2025 Housing Market Year In Review: Is There Anybody Out There? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.