(NewsNation) — The 2025 spring homebuying season is here, but so far, it feels more like a staring contest than a shopping spree.
In many ways, the U.S. housing market looks like it did a year ago — elevated mortgage rates and rising prices are keeping buyers on the sidelines. In fact, existing-home sales just posted their slowest March pace since 2009.
Add in President Trump’s trade war and sinking consumer confidence, and it’s no wonder homes aren’t flying off the market.
“Uncertainty is the key word these days,” said Joel Berner, senior economist at Realtor.com. “If people are feeling uncertain about their employment status … it’s really the labor market that underpins the housing market.”
That said, some regions offer better buying opportunities than others. Inventory has rebounded in the South and West, giving buyers more options than they’ve had in years. Austin, Jacksonville and Tampa have seen supply rise and demand cool, which has helped moderate prices.
Meanwhile, in several affordable markets across the Midwest and Northeast, tight inventory and strong demand continue to drive prices higher.
Compared to a year ago, there’s less competition, which has given buyers more leverage. However, sellers have been slow to adjust, listing homes about $40,000 higher than what they’re actually selling for, according to Redfin’s chief economist, Daryl Fairweather.
“So although there’s more new listings, they are a bit overpriced right now, and it’ll probably take some time for that to correct,” Fairweather said.
For now, the spring home buying season is shaping up to be a standoff, with buyers and sellers leaning on concessions such as mortgage rate buydowns and help with closing costs to get deals done.
Inventory is up, but it depends where you’re looking
Monthly active listings (Realtor.com)
- April 2025: 959,251
- April 2024: 734,324
There were nearly 960,000 homes on the market in April, according to Realtor.com — up 30% from a year earlier and more than double the inventory during the pandemic buying boom in 2022.
While inventory remains below prepandemic levels overall, local markets tell very different stories. Supply has bounced back in the West and South, but the Midwest and Northeast continue to lag behind, Realtor.com data shows.
Across major metros, 20 markets — all in the West and South — have surpassed their prepandemic inventory levels, led by Denver, Austin and Dallas.
Much of that is due to a new home construction boom, with Texas and Florida leading the way in recent years.
“In the Northeast, there’s been less construction and less of an onset of new listings on the market,” Berner said.
That’s one reason home prices are still rising quickly across the region while in the South, they’ve slowed — or even declined — in some areas.
Home prices still rising but slower than before
Median sales prices of existing homes (March 2025, National Association of Realtors)
National: $403,700, up 2.7% from March 2024
- Northeast: $468,000 (+7.7% from a year ago)
- Midwest: $302,100 (+3.5% from a year ago)
- West: $621,200 (+2.6% from a year ago)
- South: $360,400 (+0.6% from a year ago)
March’s 2.7% price jump was the slowest annual increase since August — a somewhat surprising result for the typically active spring season.
In fact, Zillow now expects home prices to fall 1.9% this year — a sharp reversal from an earlier forecast projecting a 2.9% increase.
“Inventory is rising, and what that means is price growth is finally starting to decelerate,” Zillow senior economist Orphe Divounguy said.
Home sellers are also competing with builders, many of whom are offering sales incentives, including mortgage rate buydowns and closing cost assistance, to attract buyers.
Divounguy said some sellers are taking a page from builders’ playbooks, adding their own perks to close deals.
In March, about 23% of the listings on Zillow received a price cut, the highest share for the month since at least 2018.
Separate data from Redfin shows that 44% of sellers in the first quarter offered concessions, including money toward repairs and closing costs, up from 39% a year earlier. In Seattle (71%) and Portland, Oregon (64%), the concession rate was even higher.
“The only real sustainable solution to get to a place of affordability is to build more housing, especially in the places that people most want to live,” Fairweather said.
Midwest and Northeast remain hot while South and West cool
Metros with the biggest year-over-year price increases (as of May 4, Redfin)
- Newark, New Jersey (13.5%)
- Pittsburgh, Pennsylvania (8.8%)
- Detroit, Michigan (8.7%)
- Philadelphia, Pennsylvania (8.7%)
- Nassau County, New York (8%)
Metros with the biggest year-over-year price decreases (as of May 4, Redfin)
- Oakland, California (-6.7%)
- Phoenix, Arizona (-3.5%)
- Jacksonville, Florida (-2.7%)
- Austin, Texas (-2.1%)
- Tampa, Florida (-1.6%)
An increase in supply has helped cool prices across the South, but softer demand is also playing a role.
“Florida and Texas are two of the weakest regions right now because they are dealing with rising insurance costs, rising HOA fees … and higher property taxes,” Fairweather said.
The recent slowdown marks a stark shift from just a few years ago, when an influx of remote workers from expensive coastal markets drove prices higher, particularly in Sunbelt states and mountain towns.
Today, home prices are climbing in the Midwest — partly because it’s one of the few regions with an affordable entry point for middle-class families.
“It’s still possible to buy a home for less than $400,000 in these Rust Belt — Midwestern, Northeastern — cities,” Fairweather said.
In other parts of the country, buying a starter home has become nearly impossible.
A recent Zillow analysis found that the typical “starter home” costs at least $1 million in 233 U.S. cities. Roughly half of them — 113 — are in California, with many of the others clustered around major metros in New York, New Jersey and Massachusetts.
Elevated mortgage rates have kept many ‘locked-in’
Avg. 30-year fixed mortgage rate (according to Freddie Mac)
- 2025: 6.76% (week ending May 1)
- 2024: 7.22% (week ending May 2)
Mortgage rates have eased slightly since last year but not enough to draw buyers off the sidelines in large numbers.
At 6.76%, today’s average 30-year fixed mortgage rate is more than twice the 3% rate many buyers locked in four years ago. Now, would-be sellers are opting to stay put rather than give up their low rate.
Fairweather expects the so-called “lock-in” effect to wear off over time as natural life changes force people to move, but acknowledged that the shift has been slow.
“Unfortunately, the people who are listing their homes are still asking for these unreasonable prices because there isn’t enough pressure on supply,” she said.
The “lock-in effect” is especially pronounced in the West, where 81% of California homeowners with mortgages have rates below 5%.
Most forecasts expect mortgage rates to come down slightly this year but nowhere near the 3% levels from a few years ago. The Federal Reserve is currently in a wait-and-see mode, holding interest rates steady as it continues to monitor the effects of President Trump’s trade war.
If rates do come down, expect buyers to move quickly.
“I think the best outcome will be for mortgage rates to come down, but hopefully at a gradual pace that doesn’t shock the market and send prices skyrocketing again,” Berner said.
