As of May 2025, the U.S. housing market has undergone a significant transformation, one that signals a dramatic shift in favor of homebuyers. For the first time in several years, more than half (56%) of homes are now selling for less than their asking price, a clear indication that the once-frenzied seller’s market is starting to cool. On average, homes are closing at approximately $45,000 below the list price, a stark contrast to the bidding wars and inflated prices that defined the previous market dynamics.
This change in market behavior is most evident in the decline in home sales, which have dropped by 15% compared to the same time last year. The slowdown has been driven in large part by persistently high mortgage rates, which are currently hovering around 7%, making home ownership less affordable for many prospective buyers. While the median list price of homes remains at a relatively high $495,000, these higher borrowing costs have led to a cooling of demand.
Another clear indicator of the market’s shift is the increased time homes are sitting on the market. The average number of days a home spends on the market before being sold has increased by a week compared to the previous year, now sitting at 58 days. This longer wait time for homes to sell reflects a change in buyer behavior, where buyers are now taking a more measured approach, unwilling to rush into purchases as they did during the market’s peak.
Additionally, inventory levels have risen in many cities across the country, further reflecting the cooling trend. Cities such as Toledo, Ohio, and Savannah, Georgia, have seen substantial increases in the number of available homes. Toledo’s inventory has surged by an impressive 128%, while Savannah’s has increased by 108%. These rising inventories provide buyers with more options, shifting the power dynamics between buyers and sellers.
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Despite these clear signs of a buyer’s market emerging, sellers have shown resistance to lowering their prices. In fact, the number of delisted homes has risen significantly, with a 48% increase in delistings year-over-year in June. This reflects a disconnect between the growing buyer leverage and the expectations of sellers, many of whom are still holding out for the higher prices that characterized the peak market.
At the same time, affordability remains a significant hurdle for many potential buyers. Even with more homes available and the cooling of the market, the high mortgage rates, combined with increased insurance costs, continue to make home ownership an elusive goal for many Americans. The market’s cooling effect has not been enough to fully counterbalance these financial pressures, making it a challenging environment for those looking to buy a home.
In summary, while the U.S. housing market in 2025 is shifting in favor of buyers, this shift is not without its complexities. With inventory increasing and homes selling for less than their asking prices, buyers now have more leverage. However, high mortgage rates, insurance costs, and seller resistance to lowering prices continue to create obstacles to widespread affordability. As the market adapts, both buyers and sellers must navigate a more cautious, slower-moving environment that could shape the future of housing for years to come.
