The US housing industry is experiencing a major recalibration in July 2025. In the past 48 hours, the market is marked by a paradox of record-high home prices and slowing sales. Data released this week reveals that the national median existing home price hit an all-time high of 435300 dollars in June, up 2.7 percent year-over-year. However, sales of previously occupied homes fell 2.7 percent from May and are now at 3.93 million units for the month, the slowest pace since September last year. This is despite a sharp 29 percent annual surge in housing inventory, which has given buyers more options but not enough leverage to drive prices down significantly.

High mortgage rates remain a central challenge. Rates have hovered between 6.6 and 7 percent since January, only modestly below last year, continuing to suppress both sales activity and affordability. Compared to salary growth, home price increases have slowed, with median asking prices rising just 2.9 percent to 407000 dollars, while average wages have grown by 4 percent over the same period. This shift, along with falling pending sales and more frequent price reductions, especially in markets like Florida and Texas, is moving the market closer to balance after the turbulence of recent years.

Builders are responding to weakened demand by cutting prices and offering incentives at the fastest rate in three years. Confidence among builders improved slightly in July, yet remains deep in negative territory, reflecting persistent caution as unsold inventory rises and single-family housing starts are 10 percent lower than last year. Multifamily construction, however, has rebounded, temporarily boosting overall housing starts.

Regulatory and policy changes—most notably the possibility of reduced immigration under the new administration—could further affect both demand and construction labor supply in the coming months. Meanwhile, the number of homes under foreclosure increased to 187,659 nationwide in the first half of 2025, a sign of ongoing financial strain for some homeowners, though this remains below pre-pandemic levels.

In short, the US housing market appears to be transitioning away from a seller’s market, marked by excess demand, toward more balanced conditions with slower growth, greater choice for buyers, and softer prices in oversupplied regions. Industry leaders are adjusting by embracing targeted incentives, cutting prices, and focusing on operational efficiency, signaling a shift from aggressive expansion toward resilience and adaptation.

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