Cruel Summer: Frustration Unites Buyers, Sellers, and Builders in a Stalled U.S. Housing Market

Cruel Summer: Frustration Unites Buyers, Sellers, and Builders in a Stalled U.S. Housing Market

 New report from Realtor.com^® dissects the gridlock affecting all corners of the housing landscape

AUSTIN, Texas, Aug. 26, 2025 /PRNewswire/ -- The U.S. housing market may be showing signs of movement on paper, but for many Americans, it feels like the market has stalled. According to Realtor.com^®'s latest report, Cruel Summer: Why the U.S. Housing Market is Stuck, buyers, sellers, and builders are all facing different challenges, yet all are united by one common experience: frustration.

"The housing market is caught in a collective slowdown, touching everyone from buyers to sellers to builders," said Realtor.com^® senior economist Jake Krimmel. "Despite facing different pressures, each group is reacting the same way, with hesitation and retreat. The result is a market that can't gain meaningful traction. That being said, a more balanced market is emerging, creating opportunities for those with the patience and flexibility to adapt."

Home sales remain near multi-decade lows, despite 21 consecutive months of rising inventory. In fact, inventory has grown 28% this summer alone (May 2025 - July 2025), reaching over 1 million homes for 3 straight months, and reaching the highest levels since Nov. 2019.  Prices have stabilized in many regions, but elevated mortgage rates and economic uncertainty are keeping both buyers and sellers on the sidelines. The report finds that across the board, stakeholders are pulling back, leading to a housing market defined less by crisis and more by a collective pause.

Buyers: Affordability Remains Out of Reach
For buyers, affordability is still a major hurdle. The national median list price remains near $440,000, relatively unchanged since 2022, while mortgage rates have climbed, pushing monthly payments significantly higher. Compared to 2019, today's buyers are paying over $1,200 more per month for the median-priced home, with costs rising due to both price growth and higher interest rates.

While incomes have grown, they have not kept pace with the increased cost of homeownership. Even in markets where prices have fallen, the "double whammy" of high rates and residual price appreciation has kept buying power low and sidelined many would-be buyers. In its recent Buying Power Report, Realtor.com^®  found only 28.0% of homes on the market were priced within reach of the typical household, earning the U.S. median household income of $78,770.

Sellers: Market Leverage Has Shifted
Sellers are also navigating an interesting landscape. Although demand has cooled, many homeowners remain reluctant to lower prices. Instead, many are choosing to delist their homes entirely rather than budge on the price they have in their mind. The delisting-to-new listing ratio climbed to 0.21 in June 2025, up from 0.13 in May, which meant that for every 100 new listings, 21 were removed without a sale. In some metros, the ratio was even higher, such as Miami, where the delisting ratio was 59 per 100 new listings.

This dynamic, combined with a recent downturn in new listings, is slowing the pace of inventory growth. Sellers' resistance to price adjustments is contributing to stalled transactions and keeping prices elevated, further compounding affordability issues.

Builders: Slowing Activity Amid Rising Costs
Builders, too, are feeling the pressure. Single-family home construction is down, permits are falling, and the pipeline of new builds is shrinking. In June 2025, Permits rose by 0.2% month over month but were 4.4% lower than last June. Starts rose by 4.6% from May 2025 but were still lower than in June 2024 (-0.5%).

Factors like high financing costs, weak buyer demand, and new tariffs on building materials have made developers increasingly cautious. This pullback comes at a time when the country is still short an estimated 4 million homes. Builders remain essential to solving the long-term supply gap, but current conditions are making it harder to justify new projects.

Regional Divergence: A Market Moving in Opposite Directions
Adding complexity to the picture is a stark regional divide. In the South and West, supply has outpaced demand, leading to slower sales and price declines. As of July 2025, the South led the nation in housing supply, accounting for more than 50% of both new and existing home listings,  outpacing its 39.4% share of U.S. households. In contrast, the Northeast and Midwest remain tight markets, with resilient demand and limited inventory continuing to drive competition.

This regional fragmentation makes it harder to interpret national trends and underscores the importance of localized strategies for buyers, sellers, and policymakers alike.

Outlook: A Market Reset
Despite these challenges, the housing market is not in crisis. Most homeowners are sitting on substantial equity. Many are locked into low interest rates. And while the pace of activity has slowed, the underlying fundamentals remain intact. As interest rates begin to ease and market participants adjust expectations, conditions for a healthier, more balanced market may gradually emerge.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact:  Asees Singh, press@realtor.com

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SOURCE Realtor.com