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US Housing Market Shifts Towards Balance: Declining Prices, Rising Inventory, and Moderate Rent Growth
In the past 48 hours, the US housing industry has shown clear signs of shifting momentum. After years of volatility, recent data points to a market gradually balancing. According to the latest Zillow forecast, home values are expected to fall by 1.4 percent this year due to rising inventory and a slight uptick in existing home sales, which are projected to reach 4.14 million for 2025 or about 1.9 percent more than 2024. Increased supply is giving buyers more leverage to negotiate, and price growth is moderating after an extended period of steep appreciation.
Mortgage rates, while still elevated, are showing hints of easing. This development could help affordability, though experts warn that rates remain higher than pre-pandemic levels and continue to discourage some would-be buyers. Housing inventory, a major story for several years, is now rising but has not fully returned to levels needed for a balanced market. Analysts at Bankrate note that inventory growth is offering some relief, but it remains below historical norms and will likely keep the market competitive.
In terms of rents, forecasts have been adjusted downward: single-family rents are expected to rise by 2.8 percent this year while multifamily rents will go up by just 1.6 percent. These moderate increases are partly the result of recent construction activity pushing up vacancy rates, especially in multifamily sectors. This means renters are seeing less pressure than buyers, and property managers are adapting with more promotions and flexible lease terms.
Industry leaders are responding to these challenges by pricing homes more competitively and signaling a shift away from the seller’s market dynamics of the past several years. Many sellers now expect to negotiate more and are adjusting their expectations accordingly, while buyers are increasingly willing to wait for prices to soften further.
Compared to late 2024, there is a more balanced dynamic. Home prices are growing only mildly or even declining in some markets, supply is up, and both buyers and sellers are approaching deals with more caution. No major regulatory changes or disruptive new product launches made headlines this week, but analysts emphasize that a potential change in trade policy or interest rates later this year could further impact the market’s direction.
Mortgage rates, while still elevated, are showing hints of easing. This development could help affordability, though experts warn that rates remain higher than pre-pandemic levels and continue to discourage some would-be buyers. Housing inventory, a major story for several years, is now rising but has not fully returned to levels needed for a balanced market. Analysts at Bankrate note that inventory growth is offering some relief, but it remains below historical norms and will likely keep the market competitive.
In terms of rents, forecasts have been adjusted downward: single-family rents are expected to rise by 2.8 percent this year while multifamily rents will go up by just 1.6 percent. These moderate increases are partly the result of recent construction activity pushing up vacancy rates, especially in multifamily sectors. This means renters are seeing less pressure than buyers, and property managers are adapting with more promotions and flexible lease terms.
Industry leaders are responding to these challenges by pricing homes more competitively and signaling a shift away from the seller’s market dynamics of the past several years. Many sellers now expect to negotiate more and are adjusting their expectations accordingly, while buyers are increasingly willing to wait for prices to soften further.
Compared to late 2024, there is a more balanced dynamic. Home prices are growing only mildly or even declining in some markets, supply is up, and both buyers and sellers are approaching deals with more caution. No major regulatory changes or disruptive new product launches made headlines this week, but analysts emphasize that a potential change in trade policy or interest rates later this year could further impact the market’s direction.
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By Quiet. PleaseIn the past 48 hours, the US housing industry has shown clear signs of shifting momentum. After years of volatility, recent data points to a market gradually balancing. According to the latest Zillow forecast, home values are expected to fall by 1.4 percent this year due to rising inventory and a slight uptick in existing home sales, which are projected to reach 4.14 million for 2025 or about 1.9 percent more than 2024. Increased supply is giving buyers more leverage to negotiate, and price growth is moderating after an extended period of steep appreciation.
Mortgage rates, while still elevated, are showing hints of easing. This development could help affordability, though experts warn that rates remain higher than pre-pandemic levels and continue to discourage some would-be buyers. Housing inventory, a major story for several years, is now rising but has not fully returned to levels needed for a balanced market. Analysts at Bankrate note that inventory growth is offering some relief, but it remains below historical norms and will likely keep the market competitive.
In terms of rents, forecasts have been adjusted downward: single-family rents are expected to rise by 2.8 percent this year while multifamily rents will go up by just 1.6 percent. These moderate increases are partly the result of recent construction activity pushing up vacancy rates, especially in multifamily sectors. This means renters are seeing less pressure than buyers, and property managers are adapting with more promotions and flexible lease terms.
Industry leaders are responding to these challenges by pricing homes more competitively and signaling a shift away from the seller’s market dynamics of the past several years. Many sellers now expect to negotiate more and are adjusting their expectations accordingly, while buyers are increasingly willing to wait for prices to soften further.
Compared to late 2024, there is a more balanced dynamic. Home prices are growing only mildly or even declining in some markets, supply is up, and both buyers and sellers are approaching deals with more caution. No major regulatory changes or disruptive new product launches made headlines this week, but analysts emphasize that a potential change in trade policy or interest rates later this year could further impact the market’s direction.
Mortgage rates, while still elevated, are showing hints of easing. This development could help affordability, though experts warn that rates remain higher than pre-pandemic levels and continue to discourage some would-be buyers. Housing inventory, a major story for several years, is now rising but has not fully returned to levels needed for a balanced market. Analysts at Bankrate note that inventory growth is offering some relief, but it remains below historical norms and will likely keep the market competitive.
In terms of rents, forecasts have been adjusted downward: single-family rents are expected to rise by 2.8 percent this year while multifamily rents will go up by just 1.6 percent. These moderate increases are partly the result of recent construction activity pushing up vacancy rates, especially in multifamily sectors. This means renters are seeing less pressure than buyers, and property managers are adapting with more promotions and flexible lease terms.
Industry leaders are responding to these challenges by pricing homes more competitively and signaling a shift away from the seller’s market dynamics of the past several years. Many sellers now expect to negotiate more and are adjusting their expectations accordingly, while buyers are increasingly willing to wait for prices to soften further.
Compared to late 2024, there is a more balanced dynamic. Home prices are growing only mildly or even declining in some markets, supply is up, and both buyers and sellers are approaching deals with more caution. No major regulatory changes or disruptive new product launches made headlines this week, but analysts emphasize that a potential change in trade policy or interest rates later this year could further impact the market’s direction.