Cruel Summer: Frustration Unites Buyers, Sellers, and Builders in a Stalled U.S. Housing Market

Rhea-AI Summary

Realtor.com (NASDAQ:NWSA) released a comprehensive report titled "Cruel Summer: Why the U.S. Housing Market is Stuck," revealing a stalled market affecting all stakeholders. Home inventory has increased 28% from May to July 2025, reaching over 1 million homes for three consecutive months - the highest since November 2019.

The national median list price remains around $440,000, with buyers facing $1,200 higher monthly payments compared to 2019. Only 28% of homes are affordable for median-income households. The delisting-to-new listing ratio increased to 0.21 in June 2025, indicating sellers' reluctance to adjust prices. Construction activity shows mixed signals, with permits down 4.4% year-over-year despite a slight monthly increase of 0.2% in June 2025.

Positive

• Home inventory growth of 28% during Summer 2025 indicates improving supply
• Housing market fundamentals remain intact with substantial homeowner equity
• Signs of market rebalancing emerging, moving away from crisis conditions
• Regional opportunities emerging, particularly in the South with 50% of total listings

Negative

• Home sales remain at multi-decade lows despite inventory increases
• Affordability crisis with only 28% of homes within reach of median-income households
• Construction activity declining with permits down 4.4% year-over-year
• Rising delisting ratio indicates market stagnation and seller reluctance
• Estimated 4 million home supply shortage persists nationally

Insights

Real Estate Market Analyst

Realtor.com report reveals a fundamentally stalled housing market with rising inventory but persistently low sales, creating a challenging environment for all stakeholders.

Realtor.com's latest report paints a picture of a housing market in limbo – not crashing, but certainly not thriving. The 28% summer inventory growth reaching over 1 million homes (highest since November 2019) hasn't translated to increased sales activity, which remain at multi-decade lows despite 21 consecutive months of inventory expansion.

The data reveals a market caught in a frustrating gridlock. Buyers face median list prices stubbornly fixed around $440,000 while mortgage rates have pushed monthly payments $1,200 higher than in 2019. Only 28% of homes are affordable for median-income households, effectively sidelining a substantial portion of potential buyers.

Sellers, meanwhile, are displaying interesting behavioral economics at work. Rather than accept market realities and reduce prices, many are simply delisting properties – the delisting-to-new-listing ratio jumped to 0.21 in June (from 0.13 in May), meaning 21 homes were removed from the market for every 100 new listings. In Miami, this ratio reaches a staggering 59 per 100.

The construction sector shows concerning weakness with single-family home construction declining and permits falling 4.4% year-over-year in June 2025. New tariffs on building materials and financing challenges are constraining new development precisely when the estimated 4 million home shortage requires aggressive building.

Perhaps most telling is the regional fragmentation – the South now accounts for over 50% of all listings despite representing only 39.4% of U.S. households, while Northeast and Midwest markets remain supply-constrained. This geographic imbalance adds another layer of complexity to the national housing picture.

While not a crisis given substantial homeowner equity and widespread low locked-in mortgage rates, this report signals a fundamental reset in market dynamics that will require patience and adaptation from all participants as the market searches for a new equilibrium.

 New report from Realtor.com^® dissects the gridlock affecting all corners of the housing landscape

AUSTIN, Texas, Aug. 26, 2025 /PRNewswire/ -- The U.S. housing market may be showing signs of movement on paper, but for many Americans, it feels like the market has stalled. According to Realtor.com^®'s latest report, Cruel Summer: Why the U.S. Housing Market is Stuck, buyers, sellers, and builders are all facing different challenges, yet all are united by one common experience: frustration.

"The housing market is caught in a collective slowdown, touching everyone from buyers to sellers to builders," said Realtor.com^® senior economist Jake Krimmel. "Despite facing different pressures, each group is reacting the same way, with hesitation and retreat. The result is a market that can't gain meaningful traction. That being said, a more balanced market is emerging, creating opportunities for those with the patience and flexibility to adapt."

Home sales remain near multi-decade lows, despite 21 consecutive months of rising inventory. In fact, inventory has grown 28% this summer alone (May 2025 - July 2025), reaching over 1 million homes for 3 straight months, and reaching the highest levels since Nov. 2019.  Prices have stabilized in many regions, but elevated mortgage rates and economic uncertainty are keeping both buyers and sellers on the sidelines. The report finds that across the board, stakeholders are pulling back, leading to a housing market defined less by crisis and more by a collective pause.

Buyers: Affordability Remains Out of Reach
For buyers, affordability is still a major hurdle. The national median list price remains near $440,000, relatively unchanged since 2022, while mortgage rates have climbed, pushing monthly payments significantly higher. Compared to 2019, today's buyers are paying over $1,200 more per month for the median-priced home, with costs rising due to both price growth and higher interest rates.

While incomes have grown, they have not kept pace with the increased cost of homeownership. Even in markets where prices have fallen, the "double whammy" of high rates and residual price appreciation has kept buying power low and sidelined many would-be buyers. In its recent Buying Power Report, Realtor.com^®  found only 28.0% of homes on the market were priced within reach of the typical household, earning the U.S. median household income of $78,770.

Sellers: Market Leverage Has Shifted
Sellers are also navigating an interesting landscape. Although demand has cooled, many homeowners remain reluctant to lower prices. Instead, many are choosing to delist their homes entirely rather than budge on the price they have in their mind. The delisting-to-new listing ratio climbed to 0.21 in June 2025, up from 0.13 in May, which meant that for every 100 new listings, 21 were removed without a sale. In some metros, the ratio was even higher, such as Miami, where the delisting ratio was 59 per 100 new listings.

This dynamic, combined with a recent downturn in new listings, is slowing the pace of inventory growth. Sellers' resistance to price adjustments is contributing to stalled transactions and keeping prices elevated, further compounding affordability issues.

Builders: Slowing Activity Amid Rising Costs
Builders, too, are feeling the pressure. Single-family home construction is down, permits are falling, and the pipeline of new builds is shrinking. In June 2025, Permits rose by 0.2% month over month but were 4.4% lower than last June. Starts rose by 4.6% from May 2025 but were still lower than in June 2024 (-0.5%).

Factors like high financing costs, weak buyer demand, and new tariffs on building materials have made developers increasingly cautious. This pullback comes at a time when the country is still short an estimated 4 million homes. Builders remain essential to solving the long-term supply gap, but current conditions are making it harder to justify new projects.

Regional Divergence: A Market Moving in Opposite Directions
Adding complexity to the picture is a stark regional divide. In the South and West, supply has outpaced demand, leading to slower sales and price declines. As of July 2025, the South led the nation in housing supply, accounting for more than 50% of both new and existing home listings,  outpacing its 39.4% share of U.S. households. In contrast, the Northeast and Midwest remain tight markets, with resilient demand and limited inventory continuing to drive competition.

This regional fragmentation makes it harder to interpret national trends and underscores the importance of localized strategies for buyers, sellers, and policymakers alike.

Outlook: A Market Reset
Despite these challenges, the housing market is not in crisis. Most homeowners are sitting on substantial equity. Many are locked into low interest rates. And while the pace of activity has slowed, the underlying fundamentals remain intact. As interest rates begin to ease and market participants adjust expectations, conditions for a healthier, more balanced market may gradually emerge.

About Realtor.com^®
Realtor.com^® pioneered online real estate and has been at the forefront for over 25 years, connecting buyers, sellers, and renters with trusted insights, professional guidance and powerful tools to help them find their perfect home. Recognized as the No. 1 site trusted by real estate professionals, Realtor.com^® is a valued partner, delivering consumer connections and a robust suite of marketing tools to support business growth. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc.

Media contact:  Asees Singh, press@realtor.com

 

View original content:https://www.prnewswire.com/news-releases/cruel-summer-frustration-unites-buyers-sellers-and-builders-in-a-stalled-us-housing-market-302537966.html

SOURCE Realtor.com

FAQ

What is the current median home list price according to Realtor.com's 2025 summer report?

The national median list price remains near $440,000, relatively unchanged since 2022.

How much has housing inventory increased in summer 2025?

Housing inventory has grown 28% from May to July 2025, reaching over 1 million homes for three consecutive months.

What percentage of homes are affordable for median-income households in 2025?

According to Realtor.com's Buying Power Report, only 28% of homes on the market are priced within reach of the typical household earning the U.S. median income of $78,770.

How much more are homebuyers paying monthly compared to 2019?

Compared to 2019, buyers are paying over $1,200 more per month for the median-priced home due to both price growth and higher interest rates.

What is the current delisting-to-new listing ratio in the housing market?

The delisting-to-new listing ratio reached 0.21 in June 2025, meaning that for every 100 new listings, 21 were removed without a sale.

How is the housing market performing differently across U.S. regions?

The South and West are seeing increased supply and price declines, with the South accounting for over 50% of listings, while the Northeast and Midwest maintain tight markets with limited inventory and continued competition.