The U.S. housing industry is experiencing a cautious slowdown as we head toward the end of August 2025. Over the past week, data shows that while home prices are still rising at a national average of around 2 percent annually, the pace has clearly eased compared to the rapid gains of previous years. The Federal Housing Finance Agency’s latest report revealed a 2.9 percent annual price increase for the second quarter, and most experts expect only modest increases by year’s end. Any major drop in prices remains unlikely, with average price dips in certain local markets staying limited to about 3.5 percent, far short of a broad correction.

A notable development has been the surge in homeowners choosing to remove their homes from the market rather than reduce asking prices. Realtor.com data indicates that for every 100 new listings in June, 21 homes were delisted—a 38 percent increase since January and a 48 percent jump from last year. Despite inventory growing nearly 25 percent from last summer, sales remain sluggish as high mortgage rates, now around 6.7 percent, and steep prices keep many buyers sidelined. Pending sales fell three percent on the year. In some markets like Miami, sellers prefer to delist than drop prices, reflecting confidence in long-term value.

Several headwinds continue to weigh on the industry. Construction firms have slowed hiring—adding only 2,000 net new employees in July compared to 30,000 last September—as labor becomes scarcer, partly due to strict immigration enforcement. Building material prices are up due to new trade tariffs, adding up to 2.5 percent more to already high construction costs. Insurance and property taxes are escalating, with U.S. insurance premiums up 76 percent since 2019 and tax bills soaring, especially in Florida and Texas.

Meanwhile, build-to-rent homes reached a record with 39,000 single-family rentals completed in 2024, signaling a shift as renters seek alternatives. Multifamily construction is active in key markets, but single-family supply is still catching up after years of underbuilding. Industry leaders are holding steady, awaiting possible Federal Reserve rate cuts as soon as September, which could spur market activity if buyer sentiment improves. Overall, the market is pausing after years of rapid changes, with supply slowly rising and buyers and sellers showing caution amid rising costs and economic uncertainty.

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This content was created in partnership and with the help of Artificial Intelligence AI