June 2025 Real Estate Market Update: Rising Inventory, Shifting Power and Upcoming Foreclosures

By Vicki Patterson

As we move into summer 2025, the U.S. housing market is undergoing significant changes, marked by increased inventory, evolving buyer-seller dynamics and notable regional variations.

Inventory Surge Shifts Market Dynamics

For the first time since 2013, home sellers now outnumber buyers, with nearly 500,000 more homes on the market than there are buyers. This surplus, the largest since Redfin began tracking in 2013, has led to a buyer's market in many areas.However, affordability remains a challenge due to high mortgage rates and elevated home prices.

Mortgage Rates and Affordability Challenges

Mortgage rates continue to hover around 6.89% for a 30-year fixed-rate loan, maintaining pressure on home affordability. Goldman Sachs projects that these rates will remain high through the end of 2025, potentially capping home price increases, which are expected to rise by 3.2% this year. 

Foreclosure Trends

According to Steven Thomas of Reports on Housing, FHA foreclosures are expected to rise, potentially impacting the housing market. Because FHA loans typically serve first-time and lower-income buyers, this increase could lead to a wave of more affordable inventory entering the market, further influencing home prices, especially in regions already showing signs of cooling.

Outlook

The current market presents opportunities for buyers, with increased inventory and more negotiating power.

However, affordability remains a concern due to high mortgage rates and home prices. Sellers may need to adjust expectations and pricing strategies to attract buyers in this evolving landscape.