Good news: The 2025 housing market is finally looking up after some challenging years

After two years of whiplash—rates spiking, inventory freezing, buyers and sellers staring each other down—the 2025 market is finally tilting in a better direction. Is it perfect? No. Is it workable? Absolutely—and the window is opening wider than it’s been in months.

The tide is (quietly) turning

• Mortgage rates have eased to the mid-6s. As of early September, the 30-year fixed averaged 6.50%, the lowest since last fall. That’s not “party like it’s 2021,” but it meaningfully boosts purchasing power and unlocks refinancing opportunities for a slice of owners.

• Payments are backing off their peak. The median U.S. monthly payment has fallen to $2,593, the lowest level in roughly a year—easing the affordability crunch that sidelined so many shoppers in 2024.

• Prices: flat-to-mixed, not free-fall. The U.S. average home value sits at $368,581, up 0.3% year-over-year—with about half of large markets down and half up. Translation: leverage is better balanced, and price cuts are back on the table without signaling a crash.

• New-home market is doing real work. July’s new-home median price dipped to $403,800 and builders continue to supply options (often with incentives), helping fill the resale gap. Sales ran at a 652,000 pace in July.

Bottom line: softer rates + more realistic pricing + builder inventory = a market that’s finally functional again.

What this means if you’re buying

• Your budget stretches farther at 6.5% than 7%+. A ~50–75 bps drop can add tens of thousands to purchase power or shave hundreds off the monthly. Don’t wait for “sub-6% or bust”—competition will heat up fast if/when that happens.

• Leverage is improving. With payments off the highs and prices mixed, buyers are seeing more seller flexibility and credits (especially on homes that missed the mark first time out). Yes, nice homes still move quickly—but you’ve got room to negotiate again.

• New construction is a real option. Builders are trimming prices and offering rate buydowns and closing-cost help. That can out-net many resale deals right now.

What this means if you’re selling

• Price to the market, not your memories. Buyers are payment-sensitive; pricing inside the active search bands (and offering a targeted buydown) keeps you in the conversation and shortens days on market. The data confirms buyers jump when monthly cost pencils.

• Presentation still wins. With more choice and balanced leverage, homes that are clean, photo-ready, and pre-inspected rise to the top. “List high and pray” is how you donate days on market to your competition.

• Don’t fear contingencies; manage them. Reasonable inspection and appraisal plans are back. Structured right, they widen your buyer pool without risking your net.

The realistic outlook for the rest of 2025

• Rates likely chop around the mid-6s near-term. They’re tied to 10-year Treasury yields and Fed expectations; recent labor data has markets leaning toward easier policy into year-end, but volatility isn’t going anywhere. Plan for wiggles, not a straight line.

• Volume should improve modestly. As financing costs cool and builders feed supply, expect more transactions—still below pre-2022 norms, but rising off the bottom.

• Prices: call it “sideways with pockets.” With half the big markets up and half down, this is what a normalizing market looks like. Skill matters: local comps and micro-trends will make or break your strategy.

How to play it (no fluff, just strategy)

Buyers

1. Get rate-locked with float-down optionality—then shop aggressively while competition is still waking up.

2. Run scenarios with and without a 2-1 buydown; sometimes the seller credit beats a price cut for your payment.

3. Don’t sleep on new construction with incentives—compare net cost over 5–7 years.

Sellers

1. Pair a sharp list price with a pre-advertised buydown or closing-cost credit to hit buyers’ monthly-payment target ranges.

2. Front-load your disclosure package and pre-inspection to keep deals together in a still-cautious market.

3. If you’re move-up/move-down, the “buy first then list” strategy is back on the table with rate stability and builder spec inventory.

👉 Bottom line: The 2025 market isn’t “easy mode,” but it’s finally functional. Smart buyers and sellers who adapt to payments, leverage, and incentives are going to win.

Thinking of buying or selling in Los Angeles or Ventura County? Let’s talk strategy. With over 30 years of local expertise, I’ll help you win in today’s market. Call or text me directly at 818.266.1100.