- Pending home sales rose by 5% in one week, but closed transactions remain 3% lower year over year.
- Housing inventory is up 28% compared to last year, giving buyers more choices and negotiation power.
- Over 33.6% of homes on the market have price reductions, reflecting weaker demand.
- Mortgage rates have eased to 6.6%, but affordability remains a concern for many buyers.
- Experts forecast a 3.5% rise in home prices in 2025, but regional markets may see localized declines.
Spring is traditionally a peak season for the housing market, drawing buyers and sellers into action after the winter lull. This year, however, market conditions are shifting. While home sales are improving, home prices are under pressure due to higher inventory levels and a record number of price cuts. Could this be the best time for buyers to snag a deal? Below, we break down the latest trends buyers should watch.
Pending Home Sales & Buyer Activity
A key indicator of housing market momentum is pending home sales, which reflect the number of homes under contract but not yet closed. According to Altos Research (2025), 63,000 pending sales were recorded in one week, marking a 5% increase from the previous week. However, despite this improvement, sales remain 3% lower compared to last year, signaling lingering challenges for the recovery of home demand.
One of the biggest hurdles for buyers remains mortgage rates. In 2023 and early 2024, rates soared to nearly 7.5%, making homeownership far more expensive. While rates have now eased to 6.6%, they remain well above the historically low levels seen in 2021 and early 2022. Should rates continue to fall to 6% or below, the market could witness a more significant rebound in home sales.
Housing Inventory: More Homes = Better Bargains?
One of the most striking changes in the spring housing market is the surge in available inventory. There are 28% more homes for sale than at the same time last year (Altos Research, 2025).
Why does this matter for buyers?
- More choices: With a greater number of active listings, buyers aren’t pressured to bid aggressively on limited options.
- Negotiation power: Sellers facing prolonged listing periods may be more willing to accept lower offers.
- Pricing pressure: Increased supply without an equal rise in demand can lead to price reductions.
However, the market is also experiencing a high withdrawal rate, meaning a notable number of sellers are pulling their homes off the market after failing to receive acceptable offers. This suggests that while inventory has expanded, some sellers are reluctant to drop their prices significantly.
Home Prices: Where Are They Headed?
The big question for buyers is: Are home prices expected to rise, stay flat, or decline?
As of now, home prices are seeing mixed trends. The median listing price has increased 1.2% from the previous week, reaching $435,000 (Altos Research, 2025). However, final sales prices have not grown at the same rate, indicating that sellers are hopeful but buyers are resisting higher costs.
Looking at forecasts for 2025, many analysts predict home prices will rise by approximately 3.5% nationwide. However, there remains downside risk, meaning that home prices could decline in certain regional markets depending on local demand and economic factors (Altos Research, 2025).
The Role of Mortgage Rates & Affordability
A crucial factor shaping the housing market is mortgage affordability. While rates have fallen from last year’s highs, they haven’t hit the crucial sub-6% range, which many experts believe is necessary to spark a real surge in buyer activity.
Why do interest rates matter so much?
- Lower rates reduce monthly mortgage payments, making homeownership more attainable.
- Sellers benefit from more buyers in the market, which can stabilize home prices.
- Increasing rates often slow demand, forcing sellers to be more flexible with pricing.
For buyers, monitoring mortgage rate trends is essential. If rates drop further in the coming months, competition could intensify, potentially outweighing the benefits of price reductions.
Price Reductions: How Sellers Are Responding
One clear sign of a softening market is the growing number of price cuts. Currently, 33.6% of homes on the market have seen price reductions, the highest level in recent years (Altos Research, 2025).
What does this mean for buyers?
- More room to negotiate: Homes sitting on the market longer are likely to accept offers below asking price.
- Market correction in progress: Sellers may have initially overpriced their properties before realizing demand wasn’t meeting their expectations.
- Waiting strategy may pay off: If price reductions continue, patient buyers could secure even better deals later in the season.
New Listings: Will More Homes Hit the Market?
Another critical factor is the number of new listings. Home sellers are slowly returning, with 76,000 new homes hitting the market in a single week, marking the highest level since September (Altos Research, 2025).
Why does this matter?
- A rise in listings gives buyers more choices, reducing competition for individual properties.
- Increased supply could further pressure home prices, especially in regions where demand remains weak.
For buyers, this suggests that patience and vigilance could pay off—especially if inventory levels continue to grow without an equivalent rise in home sales.
Regional Market Insights & Local Variations
While broad national trends provide insights, housing conditions vary significantly across different regional markets.
Key regional trends to watch:
- Florida: A growing number of unsold homes has weakened home prices, making it a more favorable market for buyers.
- The Northeast: This region remains relatively strong, with home prices holding steady amid stable demand.
- Las Vegas: Prices remain volatile, and buyers should closely watch local sales data before making an offer.
For buyers in competitive regions, working with a real estate agent who understands local inventory trends can significantly improve home-buying outcomes.
Buying Strategies for Finding a Bargain
As home prices fluctuate and inventory increases, buyers looking for deals should consider these strategic approaches:
- Target homes with price reductions – Properties with long days on market are more likely to accept lower offers.
- Negotiate aggressively – Don’t be afraid to submit offers below the listed price, particularly in high-inventory areas.
- Monitor mortgage rate trends – If rates drop further, demand could increase, reducing your ability to find deals.
- Work with an expert real estate agent – An experienced professional can help identify motivated sellers.
- Be patient and flexible – Some homes that don’t sell now may be re-listed later at even better prices.
Forecast for the Rest of 2025
Looking ahead, market trends will largely depend on three things:
- Mortgage rates – If they decline further, demand should strengthen.
- Inventory growth – A rapid increase in supply without enough buyers could lead to more price drops.
- Macroeconomic factors – The broader economy, including inflation and employment trends, will play a key role.
Should Homebuyers Expect Good Deals This Spring?
Spring 2025 could be a great opportunity for homebuyers—but only for those who approach the market strategically. While home prices are not expected to crash, the combination of higher inventory, slower sales, and price reductions means that motivated buyers can negotiate better deals.
- Buyers should remain patient and flexible.
- Monitoring local markets—especially inventory trends—is crucial.
- A drop in mortgage rates could tighten competition, so buyers should act decisively when they find a good deal.
For those seeking the best possible bargain, now is the time to start exploring options while keeping an eye on future market shifts.
Citations
- Altos Research. (2025). National housing inventory levels are 28% higher than last year.
- Altos Research. (2025). Newly pending home sales reached 63,000 in a week, a 5% increase but still 3% lower YoY.
- Altos Research. (2025). Mortgage rates currently average 6.6%, down from last year’s 7.5% peak.
- Altos Research. (2025). 33.6% of homes on the market have price reductions, signaling weak demand.
- Altos Research. (2025). U.S. home prices are forecasted to grow 3.5% in 2025, though downside risks remain.
- Altos Research. (2025). 64,000 new listings appeared in one week, the highest volume since September.