Redfin Housing Market Tracker: August 2025 Market Shifts and Strategic Insights

The U.S. housing market in 2025 has undergone a dramatic transformation, marked by a surge in inventory, a notable decline in buyer demand, and a shift in market power toward buyers. According to Redfin's Housing Market Tracker, the national seller-buyer gap reached a record 35.2% surplus in August 2025, with approximately 506,000 more sellers than buyers. Active listings climbed 20.9% year-over-year, while the pool of active buyers fell to 1.44 million, the lowest since the 2020 shutdowns. Median home prices rose modestly to $416,000, up 1.6% year-over-year, but the pace of price growth has slowed compared to previous years. Pending home sales increased slightly by 0.7% year-over-year, but the overall market remains sluggish, with homes selling at the slowest pace for this time of year since 2019. Days on market have also increased, reflecting a more balanced market where buyers have more time to make decisions.

Key metrics from Redfin's Housing Market Tracker highlight the evolving dynamics of the 2025 housing market. Existing home sales are projected to increase slightly, with an annualized rate between 4.1 million and 4.4 million, representing a year-over-year rise of 2% to 9%. Median home prices are forecasted to rise 4% in 2025, ending the year 4% higher than in 2024. Inventory levels have surged, with active listings up 20.9% year-over-year, and new listings are also on the rise. Pending sales have ticked up 0.7% year-over-year, but the overall market remains cautious. Days on market have increased, indicating a more balanced market where buyers have more time to make decisions. Regionally, the Sunbelt markets, including Miami, Tampa, Austin, and Dallas, have seen the most significant changes, with inventory buildup and price adjustments. Coastal markets, particularly in Florida, have experienced a slowdown in demand, while the Midwest and Northeast have seen more stable activity.

The broader macroeconomic environment has played a crucial role in shaping the 2025 housing market. Mortgage rates have remained near 7%, with the 30-year fixed rate averaging 6.26% in September 2025. Despite these elevated rates, buyers have shown resilience, with contract cancellation rates rising to 15% in September, up from 13.6% last year. This indicates that buyers are in the driver's seat, able to back out of deals and negotiate better terms. Inflation trends, as measured by the Consumer Price Index (CPI), have been relatively stable, but wage growth has improved, making rental affordability more manageable. Employment data shows a steady job market, with population migration patterns favoring more affordable regions in the Midwest and Northeast. Historical parallels can be drawn to the 2013 market, when a similar shift in market power occurred, but the current environment is unique due to the combination of high inventory, cautious demand, and stable economic conditions.

Regional differences in the 2025 housing market are pronounced. The Sunbelt, including cities like Miami, Tampa, Austin, and Dallas, has seen a significant buildup in inventory and a slowdown in demand, leading to price adjustments and increased buyer leverage. Coastal markets, particularly in Florida, have experienced a decline in demand, with fewer out-of-town buyers and a shift toward luxury properties. The Midwest and Northeast have seen more stable activity, with buyers relocating to these regions for affordability and protection from climate-driven disasters. Urban markets have seen a slight decline in demand, while suburban areas have remained relatively stable. Factors driving location performance include affordability, job base expansion, and the ongoing impact of remote work dynamics, which have allowed buyers to consider a wider range of locations.

Evidence from Redfin's Housing Market Tracker and corroborating datasets from Realtor.com, FHFA, and Case-Shiller supports the findings of a historic market shift in 2025. The 35.2% surplus in supply, 20.9% year-over-year increase in active listings, and 1.6% year-over-year rise in median home prices are all quantifiable indicators of a more balanced market. The 15% contract cancellation rate in September 2025, up from 13.6% last year, further underscores the shift in market power toward buyers. Data deviations can be attributed to policy shifts, such as easing regulations for homebuilders, and economic cooldown, with elevated mortgage rates and cautious consumer sentiment. Migration surges to more affordable regions have also played a role in shaping market dynamics.

For buyers, regions with growing inventory and flat prices, such as the Midwest and Northeast, offer improved negotiating power and better value. Sellers should consider competitive pricing and concessions to maximize value amid cooling demand, particularly in the Sunbelt and coastal markets. Investors may find favorable yield outlooks in emerging markets or property segments, such as rental and multi-family properties, where demand remains strong. Policymakers should focus on data-backed measures to balance affordability, encourage new construction, and address localized supply gaps, particularly in high-demand regions. These recommendations are supported by the latest Redfin data and broader housing market trends.

The short-term and long-term housing trajectories for 2025 and 2026 are shaped by Redfin trends and macroeconomic signals. In the short term, the Federal Reserve is expected to cut interest rates twice more before year-end, which could further lower borrowing costs and boost demand. However, the overall market is likely to remain cautious, with inventory levels and buyer demand continuing to influence price movements. In the long term, the housing market is expected to see a gradual rebalancing, with more new construction and a continued shift in market power toward buyers. The impact of interest rate adjustments, wage inflation changes, and builder activity will be key factors in shaping the future of the housing market. A clear forward-looking summary tied to the supporting data and identified economic conditions is that the 2025 housing market represents a turning point, with buyers gaining unprecedented leverage and a more balanced market emerging.