Is It a Buyer’s Season Yet? Housing Market Conditions Shift

The housing market has been undergoing a shift as it grapples with evolving conditions across different regions. While some areas of the U.S. continue to see strong housing fundamentals and price increases, others are experiencing notable declines, particularly in the more expensive, high-demand coastal markets. The overall trend is a tale of two housing markets: on one hand, there are regions still seeing home prices rise, particularly in more affordable areas like parts of the Northeast and Midwest; on the other hand, some of the more traditionally high-cost markets, such as Florida and the West, are dealing with declining prices. But what does this mean for homebuyers, and is it a good time to enter the market?

Solid Fundamentals in the Midwest and Northeast

Markets in the Northeast and Midwest are holding steady, with some areas even experiencing price growth. States such as West Virginia and South Dakota are seeing prices increase by 5.7% and 6.2%, respectively. These states, known for their relative affordability, have become appealing destinations for both retirees and remote workers looking for lower living costs. As a result, more people are relocating to these areas, driving home prices higher.

Dr. Selma Hepp, Chief Economist at Cotality, explains that this year’s housing market behavior is somewhat unusual, noting, “July’s decline in home prices is atypical the last two periods where we saw monthly declines in July were in 2022 and during the 2006-2008 period. This year’s decline follows a year of relatively flat home prices and persistent weakness in homebuying demand.” Despite the declines, the market remains largely balanced. Around 50% of markets are still seeing home price increases, particularly in more affordable markets such as Chicago, Indianapolis, Cleveland, Tulsa, and Louisville. In contrast, markets in Florida and the West Coast are experiencing persistent declines.

For-Sale Inventory Is On the Rise, but Affordability Remains a Barrier

There’s some good news for potential buyers: the inventory of homes for sale is gradually increasing across the nation, offering more options for buyers. However, affordability continues to be a challenge, especially in markets where home prices remain high. According to Cotality data, homebuyers now need $200,000 more than they did just a decade ago to purchase a median-priced home.

Although this is a significant increase, buyers are still seeing more homes being sold compared to last year. However, this uptick in sales has not been without challenges. Buyers and sellers often have differing expectations, which can cause delays or even cancellations of deals. In markets like Los Angeles and Washington, D.C., homes are increasingly selling for less than their asking prices, with price reductions becoming a common trend. Los Angeles experienced a slight price decline of -0.03% between June and July 2025, while Washington, D.C. saw a -0.2% drop during the same period.

Investor Activity Rises Amid Price Declines

The drop in home prices, particularly in some of the more expensive cities, has caught the attention of real estate investors. Compared to previous years, investor activity remains high and continues to make up about one-third of all property acquisitions in the U.S. This trend is largely driven by the decrease in owner-occupied transactions, which have fallen as a percentage of total sales. Investors, capitalizing on the shifting market conditions, have been more aggressive in securing properties, especially as home prices drop in some areas.

Despite some areas facing price declines, the median sales price for single-family homes in August 2025 was still $405,000. While home price growth has slowed, this is still above inflation rates, meaning home expenses are continuing to rise. The current rate of home price growth is slower than inflation, which has allowed more buyers to enter the market, as affordability improves gradually.

Looking Ahead: Is It the Right Time to Buy?

The question on many homebuyers’ minds is whether now is the right time to enter the market. The shift in market conditions both positive and negative suggests a more complex landscape than in years past. In some markets, homebuyers can still find affordable options, especially in the Midwest and Northeast, where prices are relatively stable or rising. In contrast, buyers looking in high-cost coastal cities may need to adjust their expectations, as prices in these areas continue to fall or remain stagnant.

While the increase in inventory offers some hope, the high cost of homeownership both in terms of home prices and financing continues to act as a barrier. However, with more homes becoming available and price growth slowing, buyers may find opportunities in areas where affordability is still within reach. For those willing to explore markets outside of the most popular cities, there’s potential to lock in a good deal before prices increase again.

The bottom line is that while it may not yet be a full-fledged buyer’s season, certain markets are showing signs of stability and growth, providing opportunities for buyers who are willing to be strategic about location and price expectations.

Conclusion

As we move further into 2025, the housing market is showing signs of divergence: some areas are benefiting from price growth, while others are seeing declines. The key for buyers will be to focus on affordability, stay aware of shifting market conditions, and act quickly when opportunities arise. Whether in the Midwest, the Northeast, or even specific cities in the South, there are still areas where homebuyers can find solid deals amidst a slowly stabilizing housing market. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.