Where Buyers Have Real Power — 2025 Real Estate Market Update

As of mid‑2025, the U.S. housing market is undergoing a gradual shift—buyers are gaining ground in select cities, while sellers recalibrate expectations amid slower activity and rising inventory levels.

1. Buyer Power Grows in Select Metro Areas

Despite high mortgage rates—hovering around 6.5% to 7%—that have eroded national buying power by about $27,000 compared to six years ago, a handful of markets are bucking the trend. Cities like Cleveland, Phoenix, Richmond, Indianapolis, Tampa, and Austin have actually seen increased affordability, thanks to stronger local wage growth. Cleveland leads with a 4.4% gain in buying power, followed by Phoenix at 2.5%

2. Home Sale Activity Slows, Inventory Rises

On a national scale, homes are taking longer to sell, and the number of active listings has surged to its highest level since May 2020. In July, 27.4% of listings saw price reductions—the most for that month in nearly a decade. The median days on market is up, and only about 21% of homes are selling above the asking price. This signals a more balanced, buyer-favorable environment emerging.

3. Cooling Markets, Regional Divergence

Inventory growth and slower sales are most pronounced in parts of the South and West, where supply is increasing and buyer interest softens. In contrast, the Northeast and Midwest remain tighter markets, maintaining modest price growth and limited availability.

Why It Matters to Buyers, Sellers, and Investors

• For Buyers: Now is a strategic window—especially in more affordable markets—thanks to improved affordability and more negotiating leverage.

• For Sellers: Adjusting price expectations and positioning competitively is essential. Pricing smartly can significantly shorten time on market and win better offers.

• For Investors: Markets like Cleveland and Phoenix illustrate where rental or flip investments could be more profitable, as affordability and demand converge favorably.

Takeaway

The market dynamics of 2025 are shifting—buyers in certain metros are gaining influence, broader inventory is easing seller dominance, and regional disparities are becoming more pronounced. Smart industry players will monitor affordability metrics and market-specific signals to optimize timing and strategy.

Photo by Ronnie George on Unsplash