In the past 48 hours, the US housing industry is experiencing pronounced regional divergence and signals of a slow market reset. Data through early August show that pandemic-hot Sun Belt markets like Cape Coral, Sarasota, and Naples are cooling rapidly, with price reductions more common and homes lingering unsold due to robust new construction outpacing buyer demand. In contrast, Northeastern and Rust Belt regions—such as New Haven, Rockford, and York-Hanover—now post the hottest housing activity, seeing at least 9 percent annual price appreciation and especially tight inventory, driven by sustained demand amid limited building. The only Sun Belt metro in the top five performers is Charleston, South Carolina, sustained by local job growth and migration[1].

Nationally, inventory is up 17 percent year-to-date, but listings outpace completed sales as high mortgage rates—currently averaging 6.7 percent per Freddie Mac—continue to pressure affordability and keep would-be buyers sidelined. Home prices, however, have climbed 55 percent since 2020, squeezing buyers and forcing many sellers to cut prices or pull listings altogether; delistings nationwide have surged 47 percent since last year[3]. While some platforms like Zillow forecast a 2 percent dip in national home values by year-end, most experts anticipate only mild correction, not a crash, given inventory remains below pre-pandemic levels and employment is steady[4].

The market reset is bearing out: in March, about one in four US homes listed on Zillow saw a price reduction, a significant change from spring norms and a sign of growing buyer leverage, though the market is not yet fully buyer-controlled. The current months-supply nationally is 4.4; a true buyer’s market typically begins at six months supply[5]. The pace of new-home sales declined 6.6 percent year-over-year in June, while unsold new homes were up 8.5 percent, reflecting the supply-demand imbalance[3].

Industry leaders are responding with greater focus on granular property analytics rather than relying solely on national mortgage rate trends, which have become less predictive as rates disconnect from Federal Reserve actions and show substantial local variation[2]. Most forecasts expect mortgage rates to remain just below 7 percent for the remainder of 2025, keeping the market competitive but growing more approachable for buyers as inventory gradually expands[7]. Overall, the current period is defined by regionally split momentum, a slow retreat from overheated price surges, and a cautious movement toward balanced conditions unseen since 2016[5].

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