The 2025 housing market is off to a confusing start. Depending on who you ask, we’re either heading for a long-overdue correction or experiencing a slow march toward recovery. With big-name forecasters like Zillow, Bankrate, and the National Association of Realtors (NAR) all weighing in, there’s no shortage of opinions. But one thing is clear: the market isn’t moving like it used to.
So, is the housing market actually stalling out? Or are we just in a new phase that looks very different from the frenzy of 2020 to 2022? Let’s break down what these leading voices are saying—and what it might mean for buyers, sellers, and the industry as a whole.
Mortgage Rates: The Roadblock That Won’t Move
According to Bankrate, mortgage rates dipped to 6.2% in late 2024, sparking brief optimism. But by April 2025, they had climbed back to 6.86%. That number has become the new normal, and according to Bankrate’s Chief Financial Analyst Greg McBride, rates will likely remain in the 6s for the rest of the year.
That might not sound terrible at first glance, but it’s keeping affordability tight. Buyers who became accustomed to the 3% rates during the pandemic are struggling to adjust, and many sellers don’t want to give up their low-rate mortgages either. This “lock-in” effect is still holding back inventory and limiting transaction volume.
Zillow’s original forecast suggested rates might ease and prices might dip slightly, but with Bankrate now signaling more rate stability than decline, expectations are shifting.
Home Prices: Still Rising—But Slowly
If you were hoping for a dramatic price drop, you might be waiting a while longer.
NAR reports that the median existing-home price hit $403,700 in March 2025. While that’s down from the all-time high of $426,900 in June 2024, it still marks the highest median price ever recorded for the month of March—and the 21st consecutive month of year-over-year growth.
Selma Hepp, Chief Economist at Cotality, told Bankrate she expects home-price growth to slow to about 2% this year, compared to 4.5% in 2024. So yes, appreciation is cooling, but that’s still growth—not a reversal.
So the picture becomes clearer: prices aren’t falling significantly, but they also aren’t accelerating. For many markets, it’s a plateau, not a plunge.
Inventory Is Improving—But Not Balanced
This is one of the few encouraging signs for buyers.
According to the National Association of Realtors, total housing inventory at the end of March 2025 reached 1.33 million units. That’s an 8.1% increase from February and a 19.8% increase from March 2024. That’s real progress.
But a closer look shows we still have work to do. That 1.33 million figure translates to a 4.0-month supply at the current sales pace—better than 3.2 months last year, but still short of the 5–6 months needed for a balanced market.
And here’s the kicker: most of that increase isn’t coming from existing homeowners. It’s largely driven by new construction. Homeowners with 3% mortgage rates are still reluctant to sell, which continues to suppress resale inventory and limit movement in the market.
New Construction & Political Wildcards
Bankrate also brought in some political context that Zillow didn’t touch. With a Republican sweep in the 2024 elections, builder optimism is up—fueled by hopes of deregulation. But that optimism is being tempered by the harsh reality of tariffs.
Building materials have gotten more expensive, and that’s showing up in new construction prices. According to the National Association of Home Builders, 29% of builders reduced home prices in April, and 61% offered sales incentives to buyers.
So while builder confidence may be rising, costs are still an issue. That means new homes may not get cheaper anytime soon, and construction activity remains cautious.
Regional Winners and Losers
It’s important to remember that all real estate is local, and both Bankrate and Zillow stress this in their outlooks.
Some markets are poised for continued growth. Bankrate points to cities like Miami, Boston, and Denver as areas where demand and pricing strength remain solid.
On the flip side, markets like Atlanta and Salt Lake City—where inventory has grown faster—may be more susceptible to price corrections.
For buyers and sellers, this means your strategy should be guided by local data, not national headlines. A market stall in one city might feel like a boom or bust in another.
Buyer and Seller Sentiment: A Market in Wait-and-See Mode
One underreported factor shaping the market in 2025 is consumer sentiment. According to Fannie Mae’s Home Purchase Sentiment Index, confidence in the housing market remains subdued. Only 24% of respondents in February 2025 said it’s a good time to buy a home, while 62% believe it’s a good time to sell.
This sentiment mismatch is causing friction. Potential buyers are discouraged by affordability concerns and limited choices, while sellers feel empowered—but only if they can replace their home affordably, which is no small feat in this environment.
The result? A market stuck in limbo. Many prospective buyers and sellers are simply choosing to wait, holding out for better interest rates or more favorable conditions.
Rental Market Trends: A Pressure Valve or a New Frontier?
As affordability challenges persist, more people are turning to renting—not as a stepping stone, but as a long-term alternative. According to Zillow’s latest rental report, national median rent fell to $1,829 per month, down $271 per month from March 2024.
This trend may indicate a growing divide between would-be buyers priced out of the market and investors who are stepping in to meet demand. In many cities, build-to-rent communities are thriving, and institutional investors continue to see opportunity in single-family rentals.
If this continues, the rental market could become a key safety net for displaced demand—especially as mortgage rates and home prices continue to strain affordability.
How Real Estate Pros Are Adapting
In the face of a slower, more unpredictable market, real estate professionals are being forced to pivot. Gone are the days when homes sold in hours with multiple offers. Now, agents and brokers must focus on education, strategic pricing, and personalized service to keep deals moving forward.
Many buyer’s agents are turning into long-term advisors, helping clients prepare financially months—or even years—before purchasing. Sellers’ agents, meanwhile, are doubling down on staging, pre-listing repairs, and data-driven pricing strategies to make properties stand out in a more competitive landscape.
Lenders and mortgage brokers are also adjusting. More buyers are exploring rate buydowns, adjustable-rate mortgages, and creative financing solutions to work around high interest rates. Meanwhile, real estate investors are becoming more selective, zeroing in on markets with favorable rent-to-price ratios and long-term growth potential.
The slowdown isn’t killing real estate—it’s refining it. This new era demands skill, patience, and local expertise. For consumers, working with seasoned professionals who understand the nuances of today’s housing climate can make all the difference.
Final Thoughts: Stalling or Stabilizing?
So, is the market stalling out?
Not exactly.
We’re not seeing dramatic declines in prices or activity, but we’re also not in a red-hot seller’s market. What we’re seeing is a shift—away from extreme volatility and into a slower, more measured pace.
High mortgage rates are still creating friction, especially for first-time buyers. Prices remain elevated, and although inventory is improving, it’s still far from balanced. But for those willing to navigate the uncertainty, there may be opportunities—especially in regions where supply is rising.
Ultimately, this isn’t a stalled market. It’s a recalibrating one.
Buy smart, sell smart, and stay informed. That’s the key to navigating 2025 real estate.
