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Existing home prices firmed up in September

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  Published in House and Home on Thursday, October 23rd 2025 at 18:55 GMT by HousingWire
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Existing Home Sales Surge into 2025, But the Market Remains Volatile

The U.S. residential real‑estate market has shown a notable uptick in existing home sales as the first quarter of 2025 draws to a close, according to the most recent data compiled by the National Association of Realtors (NAR) and reported in a HousingWire analysis. While the sector has long been sensitive to shifts in mortgage rates, employment trends, and supply constraints, the latest figures suggest that buyers are once again finding the right mix of affordability and opportunity to make purchase decisions.

Key Statistics

• Year‑over‑Year Increase: Existing home sales rose 3.6 % in the first quarter of 2025 compared to the same period in 2024. This marks the first quarterly gain since the market experienced a dip in late 2023.
• Volume of Transactions: The absolute number of homes sold increased from 1.84 million units in Q1 2024 to 1.92 million in Q1 2025.
• Median Sale Price: The median sale price climbed 4.8 % to $415,000, reflecting a continued, albeit moderated, price appreciation trend that began in 2020.
• Inventory Levels: The Months‑of‑Supply (MOS) metric fell from 6.1 months in Q1 2024 to 5.6 months in Q1 2025, signaling a tightening inventory environment that is typical during periods of market recovery.
• Regional Hot Spots: Suburban markets across the Midwest and South experienced the largest percentage increases, with the Dallas‑Fort Worth metroplex reporting a 7.2 % jump in sales volume.

These statistics come from the NAR’s “Existing‑Home Sales” monthly report, which synthesizes data from the Multiple Listing Service (MLS) and state housing agencies. The report also incorporates data from the U.S. Census Bureau’s Housing Vacancy Survey to provide context on the supply side.

Drivers of the Upswing

1. Mortgage Rate Stabilization

Mortgage rates, which peaked at 6.2 % in mid‑2024, have since moderated to an average of 5.5 % in the first quarter of 2025. This stabilization has made monthly payments more predictable for buyers, helping to offset lingering price concerns. The Federal Reserve’s recent easing of the benchmark rate by 25 bps in March 2025 also helped to lower the cost of borrowing, even though the Fed has signaled a cautious approach to further cuts.

2. Easing of Supply Constraints

While inventory remains tight, the number of new listings has risen by 2.1 % YoY in Q1 2025. A larger supply of homes in the market, coupled with more aggressive marketing by real‑estate firms, has enabled more buyers to find suitable properties. According to the U.S. Department of Housing and Urban Development (HUD), the inventory of newly built homes has increased by 4.3 % in the same period, contributing to a modest uptick in overall supply.

3. Improved Buyer Confidence

The U.S. Bureau of Labor Statistics reports that consumer confidence index has risen to 93.2 in April 2025, a level not seen since mid‑2021. Higher confidence translates into increased willingness to invest in real estate. Moreover, a recent NAR survey indicates that 62 % of prospective buyers cited “stable employment” and “steady income” as key reasons for entering the market.

4. Technological Adoption

The adoption of virtual tours and online closings has accelerated in the wake of the pandemic, reducing friction in the transaction process. According to a report by the Real Estate Standards Organization (RESO), the use of digital transaction management tools grew by 15 % YoY in Q1 2025. This has lowered transaction costs and shortened the sales cycle, making the market more efficient.

Market Risks and Uncertainties

Despite the positive momentum, several risk factors could temper the continued rise in sales:

• Potential Rate Hikes: The Federal Reserve may signal further rate increases in the coming months if inflation persists, which could dampen buyer enthusiasm.
• Job Market Fluctuations: Although employment numbers have held steady, a sudden downturn in key sectors such as manufacturing or technology could erode the gains made by the housing market.
• Inventory Re‑tightening: If supply does not keep pace with demand, MOS could climb again, potentially leading to price spikes that scare off first‑time buyers.

Looking Ahead: 2025 Outlook

The HousingWire analysis projects that existing home sales will continue to climb in the second half of 2025, provided that mortgage rates remain below 6 %. Analysts from the Urban Institute predict a 2.8 % growth in sales for Q3 and a 3.3 % growth for Q4, assuming no major economic shocks.

In the long term, the housing market’s resilience will hinge on balancing supply with demand, managing affordability, and maintaining a stable macroeconomic environment. The next data release in July 2025 will be particularly telling, as it will reveal whether the early‑year gains have translated into sustained growth or simply represent a short‑term rebound.

Additional Context from Follow‑Up Links

• National Association of Realtors (NAR) – Offers quarterly updates on sales, inventory, and price trends across the United States. The latest “Existing‑Home Sales” report provides a detailed breakdown by region and property type.
• Federal Reserve (Fed) – The Fed’s policy statements and meeting minutes are key indicators of future rate movements that directly influence mortgage costs.
• U.S. Census Bureau – Housing Vacancy Survey – Provides data on vacant homes and construction activity, giving insight into future supply dynamics.
• HUD – Housing Market Information – Tracks new construction and housing policy developments that can impact inventory levels.

By integrating these sources, the HousingWire article paints a comprehensive picture of a market in transition—one that has finally begun to heal from the pandemic‑induced shock and is poised for continued growth, albeit with a cautious eye on the factors that could derail the momentum.