Housing Market Gains Supply But Buyers Hit Pause in 2025

It’s a bit of a head-scratcher out there right now. You’d think that with more homes hitting the market, things would be buzzing. But that’s not exactly what’s happening. The housing market gets more supply of homes, but buyers hit pause, creating a bit of a standstill. While there are more choices for potential homeowners, the actual buying and selling isn’t picking up speed as you might expect.

From my perspective, looking at how things are playing out, this slowdown isn't a surprise. We've seen this dance before. Homeowners are hesitant to sell because they might have locking in a low mortgage rate a few years back, and buying a new place means taking on a new loan at a higher rate. Plus, for buyers, even with a bit more inventory, affordability is still a big hurdle. So, while the shelves are getting a little fuller, people are mostly window shopping for now.

Housing Market Gains Supply But Buyers Hit Pause in 2025

More Listings, But Where's the Rush?

Looking at the numbers, especially from Realtor.com®, it’s clear that sellers are starting to come back around. The first week of October actually saw more new homes pop up for sale compared to the weeks right before it. This is a good sign, reversing a short dip we saw. However, the overall energy of the market hasn't really changed much.

Hannah Jones, a senior economic research analyst at Realtor.com®, points out something important: “Homes continue to spend more time on the market than last year, and prices remain flat, signaling higher inventory and lower competition.” This tells me that even though there are more homes available, there aren’t as many folks rushing to grab them. It’s like a store putting more items out, but nobody’s lining up to buy them.

It’s also worth noting this isn't a one-size-fits-all situation. While the national scene is pretty mellow, some spots in the Midwest and Northeast are still pretty hot. These areas often have fewer homes to begin with, and when demand is high, buyers have to be super ready and quick to make an offer.

Inventory is Growing, But Slower Than It Used To Be

The big story is that the total number of homes you can choose from across the country has gone up quite a bit – about 15.1% compared to this time last year. That’s a significant increase, no doubt.

But here’s where it gets interesting: the pace at which this inventory is growing has actually started to slow down. It’s been happening for 17 weeks straight. Think of it like a bathtub filling up. The water level is rising, but the faucet isn't gushing as much as it was. As of October 4th, we had about 1.1 million homes on the market nationwide.

Hannah Jones explains this dynamic: “Active inventory is growing significantly faster than new listings, an indication that more homes are sitting on the market for longer and homeowners aren’t eager to sell.” This is a crucial point. It means the homes that are already listed are just… staying there longer. This isn't because of a flood of new sellers, but because homes aren't selling quickly.

Prices are Stable, But Maybe Not as Strong as They Seem

When we look at prices, the median list price hasn’t budged a whole lot when you compare it to the same week in 2024. It’s flat. However, if you adjust for the size of the home, the price per square foot has actually dipped by about 0.5% year-over-year. This is the fifth week in a row that this has happened.

My take on this is that while sellers might not be slashing prices dramatically, the underlying value of homes might be feeling some pressure. Hannah Jones puts it well: “Price per square foot grew steadily for almost two years, but the weak sales activity has finally caught up and shaken underlying home values despite stable prices.” Essentially, even if the sticker price looks the same, the home’s true worth, based on what buyers are willing to pay now, might be a little less.

Homes are Taking Their Time

Another big signal from the market is how long homes are hanging around before they sell. The typical home is now taking about 63 days on the market. For reference, this is pretty similar to what we saw before the pandemic really kicked into high gear.

This longer time on the market is a double-edged sword for sellers. On one hand, it means they have less pressure to sell immediately. On the other hand, as homes sit longer and longer, sellers often get more motivated to make a deal. Jones notes, “As homes spend longer on the market, sellers are more likely to reduce their asking price, eager to close a sale before the end of the year.” So, while prices might be flat overall, we might see more price reductions as the year winds down and sellers want to get rid of their properties.

What This Means for You

For buyers, this current situation presents a bit of a silver lining. You have:

• More Choices: With more inventory, you aren't as likely to be in a bidding war.
• More Time: You can take your time looking at properties without the intense pressure of just a few weeks ago.
• Potential for Negotiation: Homes staying on the market longer can give you more room to negotiate on price or terms.

However, it's still tough:

• Affordability Concerns: Higher mortgage rates are still a major barrier for many.
• Competition in Hot Areas: Don’t forget that some markets are still very competitive.

For sellers, it means:

• Patience is Key: Your home might take longer to sell than it did a year or two ago.
• Realistic Pricing: It's crucial to price your home competitively from the start.
• Be Prepared for Offers: You might need to be open to negotiation.

Ultimately, the housing market gets more supply of homes but buyers hit pause because the economic currents are complex. While more homes are available, the affordability challenges and the lingering uncertainty mean that many are waiting on the sidelines. It will be interesting to see how this plays out as we move into the new year.