Housing Market Trends July 2025 | What Our Heroes Need to Know

Welcome to the U.S. Housing Market Trends July 2025 monthly update from Homes for Heroes. This report focuses on the residential real estate housing market. We listen to the experts and boil down what they have to say to assist you, our heroes, with useful information to help you understand current housing market conditions and how they apply to your goal of buying a home, selling your home, or refinancing your mortgage.

Housing Market Trends July 2025 Key Takeaways

The housing market is ever-evolving. Economic factors, government policies, interest rates, and even socio-cultural shifts can play a role in how the market behaves. That said, here are some current housing market trends to help keep you informed as you determine what’s best for you.

• Market Normalizing – The housing market is shifting back to pre-pandemic norms, with rising inventory and more balanced conditions benefiting both buyers and sellers.
• Inventory is Up – As of May 2025 over 1 million homes are now on the market nationwide.
• Price Gaps and Reductions – Many homes are selling below asking price, with one-third of sellers reducing their prices, and highlighting the importance of realistic pricing.
• Affordability Challenges Remain – Higher home prices and mortgage rates trending between 6.5 – 7% continue to pressure affordability.
• Expired Listings Rising – Listings that are overpriced or poorly marketed are increasingly failing to sell.
• Save with Homes for Heroes – Homes for Heroes gives back to community heroes (firefighters, EMS, law enforcement, active-duty military and veterans, healthcare professionals, and teachers) with an average savings of $3,000 after buying, selling, or refinancing a home with their local specialists. Sign up today to begin and a Homes for Heroes local specialist will contact you to answer your questions.

The Big Picture – Housing Market is Finding Balance

The housing market is finally starting to feel more normal again. After years of crazy-low inventory and bidding wars, we’re seeing a shift that’s creating real opportunities for smart buyers and sellers who know what they’re doing.

Remember 2017-2019 (pre-pandemic)? Those were what we call “normal” housing market years. We’re heading back toward that balance, and that’s actually great news for everyone.

Home Inventory – More Choices Are Coming Back

The good news is we just hit a milestone. Over 1 million homes are now available for sale across the country for the first time since the winter of 2019. That’s a big deal.

What This Means for You:

• First-time buyers – Depending on the market you’re in, you will likely have more options to choose from instead of fighting over the same few homes.
• Move-up buyers – You can likely be more selective and find the right home for your growing family.
• Sellers – It is time to be smart about pricing competitively, and the overall presentation of your home, because buyers have choices now.

Regional Differences Matter:

• Midwest and Northeast – Still playing catch-up, with inventory growing 22-23% but still below pre-pandemic levels.
• South and West – Actually have more homes available now than before 2020.

Be sure to check your local market conditions, and discuss them with a real estate agent. What matters most is what’s happening in your neighborhood, not necessarily national averages.

Sign up today to speak with our local Homes for Heroes real estate specialist. They will contact you to answer any questions you may have about your community trends.

Home Prices – Reality Check

The growing trend in today’s market is a big gap between what price a home seller thinks they’ll get, and what buyers are actually paying.

The Numbers Don’t Lie:

• 80% of sellers think they’ll get their asking price or more
• 40% of homes actually sell for LESS than asking price
• One-third of sellers had to reduce their asking price

Current Price Trends:

• National median existing home sales price was $422,800 and up 1.3% in May 2025, versus May 2024
• In May 2025, 31.2% of homes sold above list price (down from last year)
• 20.9% of homes had price drops (up from 16% last year)

What’s Happening? – Many sellers believe their home should be priced higher than the market (homebuyers) are willing to pay for their home.

Action Steps for Sellers:

• Price it right the first time – Overpricing leads to your home sitting on the market
• Listen to market feedback – If you’re not getting showings or offers, the market is telling you something
• Work with a professional – A licensed pro who knows current market conditions, and has current market data and reports. Sign up today to speak with our local Homes for Heroes real estate specialist. They will contact you to answer any questions.

Action Steps for Buyers:

• Don’t rush into bidding wars – You have more negotiating power now
• Get pre-approved – Shop around for a mortgage lender to get pre-approved for home financing
• Be prepared to move fast – Especially on a home that is priced appropriately.

Home Affordability

Affordability is tough right now. The combination of higher prices over the past few years and higher mortgage rates means many families are stretched.

The Reality:

• Median existing home price in May 2025 was $422,800 nationally according to NAR Existing-Home Sales Report
• Many first-time buyers feel priced out
• We still have a housing shortage, even though we’re actively closing the gap
• The market is becoming more balanced, giving buyers more negotiating power

Mortgage Rates – The New Normal

Let’s talk about the elephant in the room = mortgage rates. Current 30-year rates are hovering around 6.5-7%, and most experts expect them to stay in this range through the end of 2025. OptimalBlue Mortgage Market Indices, as of July 2, 2025 puts the fixed conforming conventional mortgage rate at 6.675%.

Why This Matters:

• Higher rates mean higher monthly payments
• Many homeowners with 3% rates are staying put (creating less inventory)
• Buyers are adjusting their budgets and expectations

Action Steps for Buyers:

• Calculate your true affordability – Don’t just look at home prices, factor in the total monthly payment
• Consider buying down your rate – Pay extra upfront to lower your monthly payment
• Look at adjustable-rate mortgages if you plan to move or refinance in a few years
• Don’t wait for perfect rates – If you’re financially ready and find the right home, today’s rates are still historically reasonable

Action Steps for Current Homeowners:

• If you have a low rate, think carefully before selling unless you truly need to move
• Explore refinancing options if rates improve significantly

Expired Listings and Re-Listed Homes

Expired listings are up 17.6% compared to last year, and we could end 2025 with 20% more expired listings than 2024.

What This Means:

• Homes that are overpriced or poorly marketed are sitting on the market
• Some sellers are getting frustrated and pulling their homes off the market
• Smart buyers might find motivated sellers who are ready to negotiate

For Buyers – Look for homes that have been re-listed or had price reductions. These sellers are often more motivated to negotiate.

For Sellers – This is why our recommendation is always to work with an agent who can provide you with market insight, professional pricing and sound marketing strategies to sell your home (plus our agents can help you save an average of $3,000 on the sale of your home).

Your Action Plan by Situation

If You’re a First-Time Buyer

You have more choices and negotiating power than you’ve had in years.

• Get pre-approved but don’t max out your budget
• Look for homes with price reductions – these sellers are often motivated
• Consider less popular areas or buying a fixer-uppers in good a neighborhood
• Factor in ALL costs, not just the mortgage payment
• Don’t let perfect be the enemy of good, you can always move up later

If You Want to Buy Your Next Home

• Calculate the true cost of moving (selling costs, higher mortgage rate, etc.)
• Consider a bridge loan if you need to buy before selling
• Look for motivated sellers who might negotiate on price

If You’re Ready to Sell

You may not be in the driver’s seat like sellers were in 2021-2022.

• Price aggressively from day one – Overpricing leads to stale listings
• Prepare your home properly – Buyers have choices now, do not lose your sale to another listing
• Be flexible on terms – Maybe offer to pay some closing costs or include appliances
• Work with an agent you want to listen to – If they’re suggesting a price reduction, they’re probably right. Sign up today to speak with our local Homes for Heroes real estate specialist. They will contact you to answer any questions you may have about your community trends.

The Bottom Line

For Buyers – This is actually a much better market than we’ve seen in years. You have choices, negotiating power, and motivated sellers. If you’re financially ready and find the right home, don’t wait for perfect conditions.

For Sellers – Success requires realistic pricing, professional marketing, and flexibility. The days of throwing a sign in the yard and getting multiple offers over asking are nearly over.

For Everyone – Don’t make emotional decisions based on what happened in 2021-2022. That was an unusual time. We’re returning to a more normal, balanced market, and that’s actually good for everyone in the long run.

Receive an Average of $3,000 from Homes for Heroes

Homes for Heroes assists firefighters, EMS, law enforcement, active military and veterans, healthcare professionals and teachers; with buying, selling and refinancing their home or mortgage. But if you work with our local real estate and mortgage specialists to buy, sell or refinance; they also provide significant savings after you close on a home or mortgage.

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