{"id":183775,"date":"2025-07-11T12:19:53","date_gmt":"2025-07-11T18:19:53","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=183775"},"modified":"2025-07-11T12:19:56","modified_gmt":"2025-07-11T18:19:56","slug":"the-data-says-the-market-is-shifting-heres-how-investors-should-adjust","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/the-data-says-the-market-is-shifting-heres-how-investors-should-adjust","title":{"rendered":"The Data Says the Market is Shifting\u2014Here’s How Investors Should Be Adjusting"},"content":{"rendered":"\n

If you\u2019ve been sitting on the sidelines, waiting for the right time to invest in real estate again, this is your signal: The buyer\u2019s market has arrived. After years of limited inventory, rising prices, and affordability constraints, the housing market is finally shifting\u2014and that shift is creating opportunities. <\/span><\/p>\n\n\n\n

In this month\u2019s housing market update, I\u2019ll break down what\u2019s changing in 2025, why it matters, and how savvy investors can take advantage before the market turns again.<\/span><\/p>\n\n\n\n

What\u2019s Driving the Market in 2025?<\/span><\/h2>\n\n\n\n

If you had to pick one word to describe the housing market in 2025, it would be inventory. That\u2019s been the defining force behind home prices and sales activity since 2022. And this year, for the first time in a long while, we\u2019re seeing a meaningful increase.<\/span><\/p>\n\n\n\n

According to Redfin, <\/span>national inventory is up 15% year over year<\/span><\/a>, which is significant, even if we\u2019re still below pre-pandemic levels. New listings are also up compared to last year, though the rate of increase is slowing. That\u2019s an important signal we\u2019ll come back to later.<\/span><\/p>\n\n\n\n

The point is this: Supply is finally growing. And that shift is beginning to rebalance the market.<\/span><\/p>\n\n\n\n

Are There <\/span>Really<\/span> No Buyers? The Data Says Otherwise<\/span><\/h2>\n\n\n\n

There\u2019s a narrative floating around that \u201cno one\u2019s buying homes anymore.\u201d But that\u2019s just not true. <\/span>In fact,<\/span> demand has quietly been building.<\/span><\/p>\n\n\n\n

Mortgage purchase applications have now risen for 22 straight weeks, including nine consecutive weeks of double-digit increases. That\u2019s a big deal, especially considering that mortgage rates haven\u2019t dropped meaningfully. Most buyers are still looking at 6.5%+ interest, and yet demand is rising.<\/span><\/p>\n\n\n\n

This<\/span> shows us that buyers are adapting. People still need homes, and while affordability remains tight, many are getting creative\u2014buying smaller homes, moving to lower-cost metros, or <\/span>house hacking<\/span><\/a> to make the numbers work.<\/span><\/p>\n\n\n\n

Prices Are Holding, but the Trend Is Down<\/span><\/h2>\n\n\n\n

So, what\u2019s the result of rising inventory and increasing buyer activity? Let\u2019s talk prices.<\/span><\/p>\n\n\n\n

National home prices are up <\/span>1.4% year over year<\/span><\/a>, with the median home price sitting at a staggering $441,000. That\u2019s still high, but the trend is <\/span>clearly<\/span> downward. A year ago, prices were up 5% annually. Now we\u2019re down to 1.4%, and price growth is below inflation, which is currently around 2.5%.<\/span><\/p>\n\n\n\n

For leveraged investors, that still means gains in real terms. But for cash buyers or those sitting on nonperforming assets, you\u2019re losing ground to inflation. <\/span>This<\/span> is a transitional market, and these are the numbers you need to understand to play it right.<\/span><\/p>\n\n\n\n

Sales Volume Is Declining\u2014but That Doesn\u2019t Mean a Crash<\/span><\/h2>\n\n\n\n

While prices have held relatively firm, home sales volume is falling. That\u2019s not surprising, given where rates and affordability stand. <\/span><\/p>\n\n\n\n

But what\u2019s more important is why volume is falling\u2014and it\u2019s not because of a flood of distressed sellers or panic. It\u2019s because many would-be sellers are simply sitting on the sidelines.<\/span><\/p>\n\n\n\n

This<\/span> is where housing is different from the stock market. <\/span>If people don\u2019t like the terms of the market\u2014like selling into declining prices\u2014they <\/span>just<\/span> don\u2019t sell.<\/span> There\u2019s no margin call on a house. If they can afford their mortgage, they wait.<\/span><\/p>\n\n\n\n

That\u2019s why new listings are starting to moderate again. And it\u2019s happening <\/span>most<\/span><\/em> 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\u2019t expect a crash.<\/span><\/p>\n\n\n\n

Is a Crash Still Possible? Let\u2019s Look at the Data<\/span><\/h2>\n\n\n\n

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\u2019re not seeing that.<\/span><\/p>\n\n\n\n