Buyers Want To Re-enter the Market—But This Component May Stop Them

Disclaimer: PropStream does not offer investing advice or make profit promises. This article is for educational purposes only. We recommend consulting financial professionals and/or doing your due diligence before investing or working in real estate.

Despite over a 20% jump from last year in housing inventory and the highest dollar amount ever, many buyers still aren’t ready to let go of their current properties and move. Read on to learn what’s holding homebuyers back and how to navigate a slower market.

Housing Inventory Is Rebounding

Though still below pre-pandemic levels, U.S. housing inventory is on the rise. In May 2025, there were 1,036,101 active listings, up 8.01% from last month and 31.53% from last year.

Some of this uptick in inventory is from listings staying on the market longer. The median number of days a house was listed before being sold or delisted was 51 in May 2025. That’s up 2% from last month and 13% from last year.

However, new listings are also contributing to the increased housing supply. In May 2025, there were 465,096 new listings added to the market, up 7.19% from May 2024 and 14.34% from May 2023. If this trend continues, it may reflect an easing of the “lock-in effect,” where homeowners who previously refused to give up their low mortgage rates by selling are now more willing to.

Home Prices Are Leveling Off

Higher housing supply has put downward pressure on home values. Since its peak of $442,600 during the COVID-19 pandemic, the median U.S. home sales price has been moderating. For the last nearly two years, it’s stayed in the $400,000-$440,000 range.

The median listing price tells a similar story. In May 2025, it was $440,000, up 2.03% from last month and 0.11% from last year. In other words, while home values are still high, they’re not rising at the same rapid pace as they were during the pandemic.

But are moderating home prices enough to entice eager buyers to pull the trigger?

Mortgage Rates Remain Stubbornly High

Even if home price growth is slowing, high mortgage rates are still an obstacle for many buyers.

Despite hopes that mortgage rates would fall in 2025, they’ve remained high this year so far. In fact, since the average 30-year fixed mortgage rate jumped to a peak of nearly 8% in 2022, it’s mostly stayed in the 6-7% range. As of the week ending July 3rd, 2025, it was 6.67%.

Furthermore, mortgage rates aren’t expected to fall much anytime soon, partly due to uncertainty over the new administration’s economic policies. For example, Goldman Sachs recently raised its year-end prediction for the 30-year mortgage rate from 6.1% to 6.75%.

Elevated mortgage rates make buying a home significantly more expensive by increasing the total cost of borrowing. Since 74% of all buyers—and a staggering 91% of first-time buyers—rely on financing, high rates continue to put homeownership out of reach for many.

Housing Affordability Is Still a Challenge

With home prices and mortgage rates still high, housing affordability remains a major challenge. In 2023, the U.S. housing market was named the least affordable it’s been since 1984. While affordability has improved since then, it still has a long way to go.

According to the National Association of Home Builders (NAHB), nearly 60% of U.S. households are unable to afford a $300,000 home, and about 75% can’t afford the median price of a new single-family home ($459,826). In other words, income levels aren’t keeping up with home prices, though they’re more aligned in some markets than in others.

Home Sales Are Sluggish Despite Demand

Despite pent-up demand, home sales remain slow. In May 2025, there were 4,030,000 existing home sales, down 0.7% from last year. Furthermore, home sales have been falling year-over-year for the last four months and even month-over-month in March and April.

This presents a bleak picture for what are traditionally the busiest months of the year. According to NAR, sales activity between February and March typically increases by 34%. While home sales could still pick up this year, they’re unlikely to reach pandemic-levels anytime soon.

Find Property Deals in a Slow Market with PropStream

Ultimately, stubbornly high mortgage rates are keeping many homebuyers on the sidelines.

However, you can still find good deals on homes if you know where to look. With PropStream’s intuitive Lead Lists and search filters, you can find motivated sellers and off-market deals at discounted prices. Whether you’re an investor looking for your next project or an agent helping a client find their dream home, our database of over 160 million properties nationwide can help.

Notes on sources:

• All real estate data taken from Realtor.com® Economic Research (unless otherwise cited).