Sign up to save your podcasts
Or
Share 2025 US Housing Forecast: Slowing Sales, Inventory Gains, and Rental Resilience
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
2025 US Housing Forecast: Slowing Sales, Inventory Gains, and Rental Resilience
In the past 48 hours, the US housing industry continues to face significant shifts in both market activity and sentiment. According to Zillow’s latest May 2025 report, existing home sales are now projected at 4.12 million for the year, a modest 1.4 percent increase compared to 2024. However, this figure is a downward revision from last month’s estimate, reflecting ongoing market hesitation as buyers remain cautious amid economic uncertainties. Home values are expected to decline by 1.4 percent in 2025, with earlier forecasts predicting a steeper drop. The main causes are a soft start to spring sales and rising inventory, which has provided buyers with more options and put slight downward pressure on prices[1].
Nationally, supply is increasing, especially in new home construction. The inventory of new homes for sale has reached its highest level since 2007, with speculative homes for sale up 40 percent above long-term averages. Single-family existing homes for sale are up about 20 percent year over year but still sit well below historical lows[4]. The construction sector itself is seeing single-family starts expected to grow 3 percent in 2025, while multifamily starts are projected to decline 4 percent before a later rebound[3].
Mortgage rates have stabilized somewhat, and March saw pending sales activity jump by roughly 12 percent year over year, indicating some resilience as buyers adjust to the higher rate environment. Home price growth has slowed, dipping to 2.5 percent year over year in March, with Fannie Mae now forecasting a 4.1 percent increase for 2025[2][5].
On the rental side, Zillow projects single-family rental prices will rise by 3.2 percent and multifamily by 2.1 percent, mainly because the supply of rental listings has risen yet demand for single-family rentals remains strong[1].
Major housing industry leaders are responding by increasing new home incentives and focusing on affordable designs to capture hesitant buyers. Builders are also partnering with lenders to offer rate buydowns and flexible financing, while investors shift attention to single-family rentals.
Compared to a year ago, the US housing market is more balanced, with supply less constrained but demand still muted by affordability challenges, persistent inflation, and limited wage growth. There have been no major regulatory disruptions this week, but the industry remains watchful for policy changes ahead.
Nationally, supply is increasing, especially in new home construction. The inventory of new homes for sale has reached its highest level since 2007, with speculative homes for sale up 40 percent above long-term averages. Single-family existing homes for sale are up about 20 percent year over year but still sit well below historical lows[4]. The construction sector itself is seeing single-family starts expected to grow 3 percent in 2025, while multifamily starts are projected to decline 4 percent before a later rebound[3].
Mortgage rates have stabilized somewhat, and March saw pending sales activity jump by roughly 12 percent year over year, indicating some resilience as buyers adjust to the higher rate environment. Home price growth has slowed, dipping to 2.5 percent year over year in March, with Fannie Mae now forecasting a 4.1 percent increase for 2025[2][5].
On the rental side, Zillow projects single-family rental prices will rise by 3.2 percent and multifamily by 2.1 percent, mainly because the supply of rental listings has risen yet demand for single-family rentals remains strong[1].
Major housing industry leaders are responding by increasing new home incentives and focusing on affordable designs to capture hesitant buyers. Builders are also partnering with lenders to offer rate buydowns and flexible financing, while investors shift attention to single-family rentals.
Compared to a year ago, the US housing market is more balanced, with supply less constrained but demand still muted by affordability challenges, persistent inflation, and limited wage growth. There have been no major regulatory disruptions this week, but the industry remains watchful for policy changes ahead.
View all episodes
By Quiet. PleaseIn the past 48 hours, the US housing industry continues to face significant shifts in both market activity and sentiment. According to Zillow’s latest May 2025 report, existing home sales are now projected at 4.12 million for the year, a modest 1.4 percent increase compared to 2024. However, this figure is a downward revision from last month’s estimate, reflecting ongoing market hesitation as buyers remain cautious amid economic uncertainties. Home values are expected to decline by 1.4 percent in 2025, with earlier forecasts predicting a steeper drop. The main causes are a soft start to spring sales and rising inventory, which has provided buyers with more options and put slight downward pressure on prices[1].
Nationally, supply is increasing, especially in new home construction. The inventory of new homes for sale has reached its highest level since 2007, with speculative homes for sale up 40 percent above long-term averages. Single-family existing homes for sale are up about 20 percent year over year but still sit well below historical lows[4]. The construction sector itself is seeing single-family starts expected to grow 3 percent in 2025, while multifamily starts are projected to decline 4 percent before a later rebound[3].
Mortgage rates have stabilized somewhat, and March saw pending sales activity jump by roughly 12 percent year over year, indicating some resilience as buyers adjust to the higher rate environment. Home price growth has slowed, dipping to 2.5 percent year over year in March, with Fannie Mae now forecasting a 4.1 percent increase for 2025[2][5].
On the rental side, Zillow projects single-family rental prices will rise by 3.2 percent and multifamily by 2.1 percent, mainly because the supply of rental listings has risen yet demand for single-family rentals remains strong[1].
Major housing industry leaders are responding by increasing new home incentives and focusing on affordable designs to capture hesitant buyers. Builders are also partnering with lenders to offer rate buydowns and flexible financing, while investors shift attention to single-family rentals.
Compared to a year ago, the US housing market is more balanced, with supply less constrained but demand still muted by affordability challenges, persistent inflation, and limited wage growth. There have been no major regulatory disruptions this week, but the industry remains watchful for policy changes ahead.
Nationally, supply is increasing, especially in new home construction. The inventory of new homes for sale has reached its highest level since 2007, with speculative homes for sale up 40 percent above long-term averages. Single-family existing homes for sale are up about 20 percent year over year but still sit well below historical lows[4]. The construction sector itself is seeing single-family starts expected to grow 3 percent in 2025, while multifamily starts are projected to decline 4 percent before a later rebound[3].
Mortgage rates have stabilized somewhat, and March saw pending sales activity jump by roughly 12 percent year over year, indicating some resilience as buyers adjust to the higher rate environment. Home price growth has slowed, dipping to 2.5 percent year over year in March, with Fannie Mae now forecasting a 4.1 percent increase for 2025[2][5].
On the rental side, Zillow projects single-family rental prices will rise by 3.2 percent and multifamily by 2.1 percent, mainly because the supply of rental listings has risen yet demand for single-family rentals remains strong[1].
Major housing industry leaders are responding by increasing new home incentives and focusing on affordable designs to capture hesitant buyers. Builders are also partnering with lenders to offer rate buydowns and flexible financing, while investors shift attention to single-family rentals.
Compared to a year ago, the US housing market is more balanced, with supply less constrained but demand still muted by affordability challenges, persistent inflation, and limited wage growth. There have been no major regulatory disruptions this week, but the industry remains watchful for policy changes ahead.