The Data Says the Market is Shifting—Here's How Investors Should Be Adjusting

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In This Article

If you’ve been sitting on the sidelines, waiting for the right time to invest in real estate again, this is your signal: The buyer’s market has arrived. After years of limited inventory, rising prices, and affordability constraints, the housing market is finally shifting—and that shift is creating opportunities.

In this month’s housing market update, I’ll break down what’s changing in 2025, why it matters, and how savvy investors can take advantage before the market turns again.

What’s Driving the Market in 2025?

If you had to pick one word to describe the housing market in 2025, it would be inventory. That’s been the defining force behind home prices and sales activity since 2022. And this year, for the first time in a long while, we’re seeing a meaningful increase.

According to Redfin, national inventory is up 15% year over year, which is significant, even if we’re still below pre-pandemic levels. New listings are also up compared to last year, though the rate of increase is slowing. That’s an important signal we’ll come back to later.

The point is this: Supply is finally growing. And that shift is beginning to rebalance the market.

Are There Really No Buyers? The Data Says Otherwise

There’s a narrative floating around that “no one’s buying homes anymore.” But that’s just not true. In fact, demand has quietly been building.

Mortgage purchase applications have now risen for 22 straight weeks, including nine consecutive weeks of double-digit increases. That’s a big deal, especially considering that mortgage rates haven’t dropped meaningfully. Most buyers are still looking at 6.5%+ interest, and yet demand is rising.

This shows us that buyers are adapting. People still need homes, and while affordability remains tight, many are getting creative—buying smaller homes, moving to lower-cost metros, or house hacking to make the numbers work.

Prices Are Holding, but the Trend Is Down

So, what’s the result of rising inventory and increasing buyer activity? Let’s talk prices.

National home prices are up 1.4% year over year, with the median home price sitting at a staggering $441,000. That’s still high, but the trend is clearly downward. A year ago, prices were up 5% annually. Now we’re down to 1.4%, and price growth is below inflation, which is currently around 2.5%.

For leveraged investors, that still means gains in real terms. But for cash buyers or those sitting on nonperforming assets, you’re losing ground to inflation. This is a transitional market, and these are the numbers you need to understand to play it right.

Sales Volume Is Declining—but That Doesn’t Mean a Crash

While prices have held relatively firm, home sales volume is falling. That’s not surprising, given where rates and affordability stand.

But what’s more important is why volume is falling—and it’s not because of a flood of distressed sellers or panic. It’s because many would-be sellers are simply sitting on the sidelines.

This is where housing is different from the stock market. If people don’t like the terms of the market—like selling into declining prices—they just don’t sell. There’s no margin call on a house. If they can afford their mortgage, they wait.

That’s why new listings are starting to moderate again. And it’s happening most in the markets where prices are falling the fastest. Sellers see conditions worsening, so they opt out. This self-correcting behavior is a big reason I don’t expect a crash.

Is a Crash Still Possible? Let’s Look at the Data

The only way you get a crash in housing is if forced selling overwhelms demand. That usually comes from distress, specifically, mortgage delinquencies. Right now, we’re not seeing that.

Fannie Mae reports delinquency at 0.55%, down from April.

Freddie Mac reports multifamily delinquencies at 0.46%, which matches the peak of March but remains well below pre-2010 levels.

Fannie Mae’s multifamily delinquency rate sits at 0.66%, also down slightly from April.

Yes, some of these numbers are up year over year. But they’re still well below pre-pandemic norms, and there’s no evidence of a spike that would suggest a collapse is imminent.

Could that change if the labor market deteriorates? Sure. But right now, we’re not seeing the job losses that would trigger widespread distress.

How Investors Can Take Advantage of a Shifting Market

This is the moment smart investors have been waiting for—a market where:

Prices are softening.

Inventory is rising.

Buyer competition is lower.

Sellers are more negotiable.

It’s not just theory—we’re already seeing the data support this shift. List-to-sale price ratios are falling, and sellers are more open to concessions and discounts.

So what should you do?

Negotiate hard—You may be able to buy well below recent comps.

Look for stale listings—Sellers who listed in spring and haven’t gotten bites are more likely to deal now.

Watch your underwriting—Build in margin for further softening, and stress-test your deals.

Be patient, but decisive—Good opportunities are coming back, but they still go fast when they show up.

Final Thoughts: Welcome to the Buyer’s Market

This isn’t a crash. It’s a normal correction after an extraordinary run. Prices are adjusting. Sales are slowing. But there’s no sign of systemic failure.

What we’re seeing now is a buyer’s market—not because it’s easy, but because the power is shifting. And if seller hesitation continues, it could stabilize prices sooner than expected and set the stage for the next phase of the cycle: bottoming and recovery.

We’re not there yet—but we’re closer than we’ve been in years.

Until then, keep watching the data, stay disciplined, and use this window to position yourself for what’s next.

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