The current U.S. housing market is undergoing significant changes, reflecting trends of increasing listing inventories and declining median prices. According to Realtor.com's February 2025 housing data, the number of homes actively for sale has increased by 27.5% compared to last year, marking the 16th consecutive month of rising inventory. This trend indicates the market is shifting, offering buyers more options and negotiating power amid changing economic conditions.
One of the most notable statistics is the total number of unsold homes, which includes those under contract, rising by 18.2% year-over-year. This increased inventory is attributed to sellers listing their homes at greater rates than last year, with newly listed properties seeing a jump of 4.2%. Despite the growth in the number of listings, the median price of homes available on the market has decreased by 0.8% to $412,000.
Interestingly, this reduction occurs alongside the fact more small homes are being listed this year, which has contributed to lower average list prices. Instead, when accounting for size, the median list price per square foot has still shown growth, increasing by 1.2% year-over-year, signaling continuing underlying home value growth. Homes on the market, on average, are spending 66 days waiting for buyers—five days longer than they did last year—suggesting buyers have gained more time to make decisions.
Price adjustments are also on the rise, as 16.8% of sellers made price cuts this February, up from 14.6% the previous year. According to Realtor.com, this trend of rising price reductions suggests sellers are increasingly adjusting to match the rather sluggish market conditions. “The high share of price reductions could signal future price softening as sellers adjust to market expectations,” the report stated.
While the number of homes for sale has been climbing, it is still down 22.9% compared to historically typical levels observed between 2017 and 2019. Therefore, even with current gains, the inventory remains somewhat constrained compared to pre-pandemic years, indicating some residual challenges for buyers and sellers alike.
Although it's evident inventory poses challenges, there is potential bright news; housing markets seem to have begun to stabilize. The report reveals all four U.S. regions observed growth, with the West showing the most notable increase at 37.4%. This regional growth was followed by the South at 29.9%, the Midwest at 18.7%, and the Northeast at 9.2%. This consistent uptick points to recovery and improvement across multiple markets.
Further examining specific metropolitan areas, notable increases were found among the largest markets. For example, Denver experienced inventory growth of 64.4%, followed by San Diego at 61.3% and Las Vegas at 60.8%. Despite these increases compared to last year, it’s noteworthy to mention most metropolitan areas are still operating with lower inventory compared to pre-pandemic metrics.
Another area of interest is the amount of time homes are spending on the market. Homes were reported to take longer to sell, which offers buyers increased leeway in negotiations. “Buyers can afford to take their time, thoroughly evaluate options, and negotiate deals,” highlighted the Realtor.com report. This trend of extended market time has been consistently reported over the past 44 weeks.
Looking forward, some analysts predict the home-buying market may strengthen as potential buyers become more confident, especially with the spring buying season approaching. Following years of rapid price increases and tight inventories, the current data suggests it could be turning toward favoring buyers as they will have access to more choices and greater negotiating power.
Buyers should remain patient, particularly as more homes come onto the market and sellers adjust their pricing expectations to meet demand. The overall housing market appears to still be in transition, with the next couple of months being pivotal for determining its course. With forecasts anticipating modest increases of 1.5% for home sales by 2025, many buyers may finally find the opportunity to enter the housing market with more competitive pricing strategies.
Overall, the current housing market dynamics reveal both opportunities and challenges. While increasing inventories and declining prices indicate some market cooling, they also present unprecedented chances for buyers seeking homes with equitable pricing. Continuing to monitor these trends will be key for both potential buyers and sellers as they navigate this unpredictable market.