As of September 19, 2025, the U.S. housing market is displaying early signs of stabilization, marked by modest gains in existing-home sales and a slight cooling in the rate of home price increases. According to data from the National Association of Realtors (NAR), existing-home sales increased by 2.0% in July, reaching a seasonally adjusted annual rate of 4.01 million units. This uptick in home sales is being attributed to improving affordability, as wage growth has started to outpace the increase in home prices.
In July, the median existing-home price stood at $422,400, reflecting a modest 0.2% rise from the previous year. While home prices have continued to grow, the pace of increase has slowed, signaling that the market is cooling somewhat after a period of rapid price hikes. However, regional disparities persist. For instance, the West region experienced a 1.4% drop in median sales prices, while the Midwest saw a more substantial 3.9% increase, indicating that the housing market’s dynamics are not uniform across the country.
Inventory levels have remained relatively steady, with a 4.6-month supply at the current sales pace. This suggests that, overall, the market is balanced, with neither an overwhelming surplus of homes nor a severe shortage. A balanced inventory is crucial for stabilizing home prices and allowing buyers and sellers to engage in the market without extreme price fluctuations. However, the inventory of available homes is still limited, particularly in certain areas, which remains a challenge for buyers looking for more options.
Despite these positive indicators, several obstacles remain in place that could hinder more substantial recovery in the housing market. High mortgage rates continue to dampen affordability for many potential buyers, particularly first-time homebuyers, who are finding it increasingly difficult to enter the market due to the combination of higher borrowing costs and home prices that are still rising, albeit at a slower pace. Additionally, the housing supply remains constrained, especially in desirable urban areas, further limiting options for buyers.
Industry experts have pointed out that while these trends signal a stabilization in the market, more substantial improvements in affordability and housing supply are necessary for sustained growth. The market is showing signs of resilience, but for it to continue its recovery, efforts to address affordability and increase the availability of homes are essential. This could involve easing financial conditions, potentially through rate adjustments or other economic measures that would help make homeownership more accessible to a broader segment of the population.
As the housing market moves forward, the focus will likely remain on addressing the twin challenges of high mortgage rates and limited inventory. While there are encouraging signs of stabilization, the long-term outlook for the housing market will depend on how these issues are managed in the months and years to come. Buyers and sellers alike will be watching closely to see if these trends continue and whether further improvements in affordability will help pave the way for a more sustainable and balanced market in the future.
