Realtor.com
Home prices remained steady and buyers had more time to make decisions as the number of homes on the market continued to climb compared with last year, according to Realtor.com® weekly housing data.
New listing growth rose again from last week. It trailed behind what we’ve seen year to date and will be an important indicator to watch as regional real estate trends diverge.
Recent home price trends caused a dip in the value of household real estate from prior quarters, but the value of homes is still higher than one year ago, totaling $47.9 trillion.
Combined with rising mortgage debt, this also meant a drop in home equity in the first quarter, but a gain relative to the prior year. As a share of today’s total housing value, equity remains close to long-term highs, reflecting the strong position of today’s homeowners in aggregate. The picture for individual homeowners can and will vary.
The Federal Reserve came out of its two days of meetings letting Americans know it’s keeping its policy rate steady in June—with a current rate of 4.25% to 4.5%. Even as inflation data improved, a still healthy labor market enabled the Fed to wait and see how tariffs may affect price trends.
Keeping the end goal in mind, Chairman Jerome Powell told reporters in response to a question, “The best thing we can do for the housing market is to restore price stability in a sustainable way and create a strong labor market.”
The Fed’s new projections revealed a modest downgrade to economic growth and a slight uptick in unemployment and inflation through 2027. The median expectation for the policy rate is unchanged for 2025, consistent with two quarter-point rate cuts by the end of the year. This means that the Fed’s policy rate could drop below 4% by December.
In the mortgage market, rates on a 30-year fixed loan dropped for a third straight week. But again, the improvement was fairly modest, keeping rates relatively high.
In this context, builder confidence fell in June from an already low May level. Consistent with sluggish confidence, both total housing permits (1,393,000) and housing starts (1,256,000) dropped to five-year lows. A fairly steady pace of housing completions at the same time that builders sensed waning demand prompted an increase in price cuts and other incentives for new-home buyers. This means it’s not a bad time to be a new-home shopper.
Finally, it’s important to keep tabs on the rental housing market, since many aspiring homeowners are currently renting. The May 2025 Rental Report showed yet another decline in rents. This cooling trend has helped keep the upward trend in rent below that of overall inflation over the past six years, but there’s significant local variation with some markets seeing rents grow faster than inflation, while in others, rents have increased at a slower pace than overall prices.
