2025 Mid-Year Market Update: What Buyers and Sellers Need to Know

Written by: Peter Prudden

The rapid rise in mortgage rates throughout 2023 and 2024 effectively paused market momentum—see my prior analysis, A Housing Market on Hiatus. As we closed out 2024, the impact of demand destruction resulted in the worst housing conditions since 1995. With spring came a wave of optimism that the housing market might finally be awakening. However, the reality is mixed, dotted with outliers.

In April, active listings—measured as inventory of homes for sale—rose 30.6% year-over-year, marking the 18th consecutive month of inventory growth, according to Realtor.com. The long-standing narrative of an inventory shortage is now firmly in the rearview mirror. In addition, 44.4% of sellers who entered into a purchase agreement did so with a price concession, double the rate seen at the market’s peak in June 2022.

Shifting away from interest rates and into broader macroeconomic forces, we’re seeing early signs that the consumer is beginning to feel the weight of excessive debt and elevated servicing costs. Leading up to the 2007–2008 crisis, delinquencies were rising across the board, but mortgages were at the epicenter, with serious delinquencies at 1.5%, driven by subprime lending and an overheated housing market. Credit card (5.1%) and auto loan (2.8%) delinquencies were elevated but less central.

Fast-forward to Q4 of 2024, and the landscape is notably different. Mortgages are relatively stable, with serious delinquencies at just 0.70%. However, credit card (11.35%) and student loan (7.74%) delinquencies have reached crisis levels, far exceeding those of 2007. Auto loans are also elevated at 4.48%, reflecting broader financial strain across the consumer base. The systemic context is even more concerning today: the national debt-to-GDP ratio is 124% (vs. 64% in 2007), and annual interest costs have tripled—$1 trillion today compared to $300 billion in 2007. While household debt today is less mortgage-centric, the alarming rise in consumer debt delinquencies signals that the U.S. economy may be approaching a tipping point, through different channels than we saw in 2007–2008. The 14-fold spike in student loan delinquencies and elevated credit card distress paint a stark picture, particularly for younger Americans.

While the overall market remains challenging, there are still meaningful opportunities for both buyers and sellers. For every home that lingers on the market, there are others receiving multiple offers immediately. Why? Because today’s buyers are willing to transact, but only when they can clearly see and understand the value. As the saying goes, “Price is what you pay. Value is what you get.”

For sellers, this is where the right representation matters. A skilled real estate agent’s role is to shape and communicate that value to the market—this is what ultimately makes a sale happen.

Since launching our sales division in 2018, my partner and I have consistently ranked among the top 10 producers in our market, with a 98% closure rate. That means when you list with Prudden, you sell with Prudden. With an average deal size of $1.7 million, we know how to create a market for your property—whether the tide is rising, falling, or standing still.