Housing Market 2025: Booming vs. Shrinking Inventory Across America

It’s a tale of two housing markets in 2025. While overall inventory is climbing, the story isn't the same everywhere. Some areas are seeing a flood of homes for sale, while others remain bone-dry, creating a significant divide that buyers and sellers alike need to understand.

If you’re looking to buy or sell a home this year, pay close attention, because where you are matters more than ever.

For a while now, I've been watching the housing market closely, and it feels like we’ve entered a new phase. Gone are the days of bidding wars on every street and homes selling in a blink of an eye. Instead, we're seeing a more nuanced market, and the biggest story of 2025 has to be this growing inventory divide. It’s not just about more houses being available; it’s about where those houses are, and what that means for prices and competition.

Housing Market 2025: Booming vs. Shrinking Inventory Across America

According to the September 2025 Monthly Housing Market Trends Report from Realtor.com®, actively listed homes across the country have jumped by a healthy 17.0% compared to last year. That's a good sign for buyers, meaning more choices on the table. However, the speed at which this inventory is growing has actually slowed down since May. Think of it like this: the tide is still coming in, but it’s not rushing in quite as fast. Even with this increase, we're still 13.9% below where we were before the pandemic hit, which keeps things from feeling too, too easy.

But here’s where it gets really interesting and a bit complicated: this inventory growth is not happening evenly. The Realtor.com® report highlights a widening gap between regions. Places in the South and West are actually seeing more homes for sale than before the pandemic, and they're still adding to that supply. On the flip side, the Northeast and Midwest are still struggling with serious inventory shortages.

This isn't just a small difference; it's a major shift that’s changing the game for people looking to buy or sell.

The Regional Story: Oceans Apart in Inventory

Let's break down this regional divide. It’s the biggest story in housing right now, and it’s fundamentally changing what it means to be a buyer or seller depending on where you live.

Where Inventory is Booming (or at least Recovering Well):

The South and West are leading the pack in inventory recovery. According to Realtor.com® data from September 2025, these regions have not only surpassed their pre-pandemic inventory levels but are still seeing that supply grow. Metros like Denver and Austin, which were once incredibly tight markets, now have significantly more homes available than they did in the 2017-2019 period. Denver, for example, is 59.6% above its pre-pandemic inventory norm! Austin isn't far behind, at 46.9%. This is a huge shift from just a few years ago.

We're seeing year-over-year inventory growth in all four major regions, but the West is seeing the fastest pace at +21.1%, followed closely by the South at +17.9%. Even within these booming areas, some cities are really standing out. Washington, D.C. saw active listings jump by a massive 48.7% year-over-year, and Las Vegas is up 40.8%.

What's behind this surge? A combination of factors could be at play. In some of these faster-growing areas, there might have been more new construction built during the boom years that is now coming onto the market. Also, sellers in these markets might be more motivated to list as prices have held strong or are even increasing on a per-square-foot basis, especially in the Northeast.

Where Inventory Remains Scarce (The Supply Crunch Continues):

In stark contrast, the Northeast and Midwest are still deeply undersupplied. These regions are the ones grappling with the aftermath of years of limited building and a sustained demand. Realtor.com® data shows that the Northeast is still 48.6% below pre-pandemic inventory levels, and the Midwest is 36.4% below.

The pace of inventory growth in these areas is much slower. The Midwest saw an increase of 13.2% year-over-year, while the Northeast lagged behind at 10.1%. This means that while there are more homes than last year, there still aren't nearly enough to go around for the number of people who want to buy.

Cities like Hartford, CT, are experiencing the most severe shortages, sitting a staggering 74.8% below their pre-pandemic inventory. Chicago isn't doing much better, at 56.9% below, and Providence is 55.1% below. These are areas where finding a home is still a significant challenge for buyers, and competition remains fierce.

My Take: This regional divergence makes perfect sense when you think about population shifts and building trends. The South and West have been magnets for people moving from more expensive states, and while building might have lagged temporarily, it often picked up more steam there. The Northeast and Midwest, particularly older industrial areas, have faced demographic challenges and less robust new construction over decades, exacerbating the current supply crunch.

The Flow of Homes: New Listings and Pending Sales

It’s not just about the total homes on the market; the flow of new listings and how quickly homes go under contract tells us a lot about the momentum of the market.

New Listings: A Mixed Bag

Nationally, Realtor.com® reported a slight dip in newly listed homes by 1.2% year-over-year in September 2025. This follows a strong September in 2024, making the year-over-year comparison a bit tricky. New listings are also down 1.8% since last month and are significantly below their April peak for the year.

However, the trend is different by region. The Northeast and Midwest actually saw an increase in new listings (+1.3% and +2.4%, respectively). This might be contributing to the relative inventory gains in those areas. On the other hand, the South saw a decrease of 3.5%, and the West was flat at -0.1%.

Cities that saw the strongest growth in new listings include Indianapolis (+10.6%), Charlotte (+9.7%), and Detroit (+8.0%).

Pending Sales: Slowing Down

While inventory is up, buyer enthusiasm, as measured by pending sales, is more subdued. Nationally, pending sales—homes that are under contract and waiting to close—were flat year-over-year. This is the first time we haven't seen a year-over-year decrease in pending sales in 2025, which is a slight positive, but it’s a far cry from the rapid sales we saw a few years ago.

This slowness in pending sales, combined with the increasing inventory, is what's giving buyers a bit more breathing room.

Momentum: How Long Homes Are Sitting and What They're Selling For

The pace of the market is a crucial indicator. Data from Realtor.com® in September 2025 shows that the typical home spent 62 days on the market. That's a full week longer than last September. This marks the 18th consecutive month where homes have taken longer to sell compared to the previous year. This extended time on market is a key reason why inventory is climbing.

Time on Market: The Slow Clock Ticks Louder

• West: Homes are taking 10 days longer to sell compared to last year.
• South: An 8-day increase in days on market.
• Midwest: A modest 3-day increase.
• Northeast: The slowest change at just 1 day longer.

Interestingly, when we look at this compared to pre-pandemic times, only the West is experiencing slower sales. The South, Midwest, and especially the Northeast are actually selling homes faster than they did before COVID-19. This again underlines the severe supply constraints in the Northeast.

Metros like Miami (+16 days), Orlando (+14 days), and Las Vegas (+13 days) are seeing homes sit the longest, reinforcing the broader cooling trend in those areas.

My Observation: This slowdown in market speed is significant. It gives buyers more time to see homes, consider their options, and negotiate. Sellers can't just list a home and expect it to fly off the shelves anymore. It requires more strategic pricing and marketing.

List Prices: Flat Nationally, But Regional Declines and Nuances

The national median list price held steady at $425,000 in September 2025, unchanged from last year. However, when you dig deeper, the story shifts dramatically. The West saw prices dip by 3.6% year-over-year.

On a price per square foot basis – a better measure of value that accounts for home size – the differences are even starker:

• Northeast: Prices are rising (+3.1%).
• Midwest: Prices are also seeing modest increases (+1.2%).
• South: Prices are falling (-1.2%).
• West: Prices are also falling (-1.6%).

This means that while the national average might look stable, homes in the Northeast are becoming more expensive on a per-square-foot basis, while those in the West and South are becoming relatively cheaper, even if the overall median list price hasn't moved much.

Price Cuts: A Buyer’s Best Friend (Especially in Certain Areas)

Price cuts are still a defining feature of the 2025 market. Nearly 20% of listings nationwide saw a price reduction in September. This is up slightly from last year, and it signals that sellers are adjusting their expectations.

Where Sellers Are Cutting Prices:

The Realtor.com® data reveals that price cuts are more common at the lower end of the market. Sellers listing homes under $350,000 are the most likely to cut their prices. In contrast, sellers of luxury homes (over $1 million) are much more patient, with fewer price reductions on their listings. This makes sense; typically, sellers of more affordable homes need to sell to purchase their next property, making them more sensitive to market conditions. Luxury sellers often have more flexibility.

Regional Differences in Price Cuts:

The Northeast stands out with fewer price cuts (14.0% of listings), again highlighting its strength as a seller's market due to low inventory. The Midwest (19.2%), South (21.1%), and West (20.9%) all saw a higher percentage of listings with price reductions.

Let's Look at Specifics from the Realtor.com® Report:

Imagine Portland, OR, a city with a lot of price cuts. Here, nearly 34.2% of homes under $350k got a price cut, while only 23.6% of homes over $1 million did.

Now, contrast that with Hartford, CT, a much hotter market. In Hartford, price cuts are much less common overall (only 11.0% of listings), and they don't vary as much by price tier. In fact, they are slightly more common at the top of the market, which is the opposite of the national trend. This is a telling sign of just how tight inventory is in places like Hartford.

Putting It All Together: My Expert Take

As someone who has navigated countless real estate transactions, I see this housing market divide as the most critical trend of 2025.

• For Buyers: If you are in a Southern or Western market where inventory is booming, you are in a much stronger position. You have more choices, more time to decide, and more leverage to negotiate. You might even find sellers more willing to offer concessions. However, if you're looking in the Northeast or Midwest, be prepared for a much tougher competition. You'll need to act quickly, have your finances in order, and be ready for potential bidding wars, even if they aren't as intense as a couple of years ago.
• For Sellers: The old golden rule applies here more than ever: location, location, location. If you're in a high-inventory market (South/West), you'll likely need to be more competitive with your pricing and be open to negotiations. If you're in a low-inventory market (Northeast/Midwest), you're in a much better position to command a good price. However, even in hot markets, beware of overpricing. Even the best markets can see homes sit if the price isn't right. My advice for sellers is to focus on presenting your home immaculately and pricing it strategically based on recent comparable sales, not just wishful thinking. Even a slightly “hotter” market can cool rapidly if inventory suddenly increases or buyer demand wanes.

This divergence also means that national real estate news can be misleading. What’s happening in New York City is very different from what’s happening in Phoenix. Understanding your local market's specific inventory levels, days on market, and price trends is paramount for making smart decisions.

The housing market is always a moving target, but in 2025, the direction your target is in, geographically speaking, is making all the difference.