After years of rapid appreciation, the U.S. housing market is finally slowing. Home prices rose just 4.5% year-over-year in Q1—the smallest increase since 2023—and Moody’s projects growth to drop to just 1.0% in Q4, the lowest rate in six years. That would bring full-year 2025 gains to just 1.8%, the weakest since 2011.
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Realtor.com data shows the median list price ticked up 0.6%—the first increase in 10 months—but homes are taking longer to sell, with average time on market up four days year-over-year. A 20% rise in inventory is giving buyers more options, while higher mortgage rates (6–7%) are keeping sellers sidelined.
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An increase in home listings for sale is rising rapidly in vacation areas like Miami, the Outer Banks, and Galveston, Texas. According to Realtor.com, 34% of homes on sale recently cut listing prices in response to increased inventory but stagnant buyer interest.
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March existing home sales fell 5.9% from February to the slowest pace since 2009, with first-time buyers still below historic averages. Regional weakness is most visible in the West, where affordability remains tight.
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Tariffs are adding new pressure, pushing up costs on appliances, furnishings, and construction materials. With inflation risks rising and rate cuts delayed, buyer sentiment is shifting. Sellers are holding firm on prices—for now—but momentum is fading. The market is no longer red-hot; it’s cooling, slowly but decisively.

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