May 2025 Real Estate Market Update

Welcome to our May 2025 real estate update! In this edition, we’re breaking down the latest trends from across the housing market, with insights on everything from price fluctuations and inventory changes to regional updates. Whether you're buying, selling, or just staying informed, we’ve got the details you need to navigate the evolving market and make smart decisions.

May Financial Market News

• Credit card and auto loan balances dropped in early 2025, but past-due student loans surged after pandemic-era protections ended, dragging down credit scores and pushing student loan delinquency to 7.74%.
  
  
• In May, unemployment stayed flat at 4.2%. Health care led job growth with 62,000 new positions, followed by 48,000 in leisure and hospitality and 16,000 in social assistance
  
  
• The U.S. added 139,000 jobs in May, beating expectations of 125,000.
  
  
• Wages rose more than expected with hourly earnings up 0.4% in May and 3.9% year-over-year.
  
  
• The current annual inflation rate is 2.4% - still above the Fed's 2% target.
  
  

May National Housing Market News

• The national median list price held steady at $440,000, while price per square foot saw a slight 0.6% uptick.
  
  
• Home prices dropped in 38 U.S. cities in Q1 2025, including 11 areas across Florida. The city of Sebastian saw the steepest home sales price decline at 8.2% year-over-year.
  
  
• Detroit, Cleveland, and Dayton are the most affordable U.S. metros to buy a home, with median sale prices under $230,000 which is well below the national median of $431,000.
  
  
• Housing inventory is rising nationally, with active listings up 31.5% from May 2024 to May 2025.
  
  
• As of May 2025, 10 states have more homes for sale than they did before the pandemic: Arizona, Colorado, Florida, Hawaii, Idaho, Oregon, Tennessee, Texas, Utah, and Washington.
  
  
• Fannie Mae’s May 2025 survey shows housing sentiment is rising, with the Home Purchase Sentiment Index up 4.3 points to 73.5—4.1 points higher than this time last year.
  
  
• In May 2025, 19.1% of listings had price cuts (the highest for any May since at least 2016) marking five straight months of increases and signaling a shift toward a more buyer-friendly market.
  
  
• Miami remains the top U.S. housing market for foreign buyers in 2025, thanks to its mix of culture, beaches, international business ties, and no state income tax.

• McAllen, Texas ranked #1 in the nation for first‑time home buyers in 2025 thanks to a median sale price of $204,500, strong affordability, and steady inventory, making it a standout launchpad for newcomers.
  
  

May National Housing Trends

• More Gen Z buyers are teaming up with siblings to afford homes, with 22% buying with siblings in 2025, up from 12% in 2024 and just 4% in 2023.
  

• First-time buyers are putting down a median of 9%, or about $35,850. Repeat buyers are putting down around 23%, or roughly $91,600.

• 21% of prospective Gen Z buyers plan to rely on family loans to help with their down payment.
  
  
• Realtor.com reports that many sellers are overpricing their homes, leading to a surge in price reductions as the market shifts and buyers gain leverage.
  
  
• Suburbs are outpacing big cities in popularity, as remote workers seek affordability, space, and family-friendly amenities without being tied to urban centers.
  
  
• As new construction lags, buyers are turning to older homes, raising the median age of purchased homes to 36 years in 2024 (up from 27 in 2012).
  
  

May Regional Housing Market News

Curious about how the housing market is shifting in your area? Here’s a closer look at the latest trends across different regions of the U.S. From price changes to inventory updates, we’ve got the insights you need to stay ahead in your local market.

Northeast Region Housing News:

• Median home prices in D.C. sit at $600,000, but over 6,000 listings are priced below that—especially condos and townhomes. Prince George’s County in Maryland offers the best value, with more than 1 in 3 single-family homes (3+ bedrooms) listed under $600,000.
  
  
• In May, the Northeast saw a 19% year-over-year rise in inventory, though it's still about 52% below pre-pandemic norms.
  
  
• The Hamptons luxury market keeps defying expectations with Q1 home sales jumping 86% year-over-year and median prices now at $2 million, buoyed by high-end buyers.
  
  
• Northern Virginia saw a 69% jump in active listings in April while prices held strong with the median home price rising 3.7% to $779,000. More supply and steady demand signal a shift toward a more balanced, sustainable market.
  
  
• Pennsylvania passed a bill to create tax-deductible savings accounts for first-time home buyers, expected to boost home purchases by up to 4,000 a year and generate up to $68.8M in economic activity.
  
  

Midwest Region Housing News:

• Missoula, Montana sees near-record new listings, signaling a more balanced market in early May with 52 newly-listed homes (the highest in over four years), bringing total active listings to 271.
  
  
• Indianapolis, Indiana is firmly a buyer’s market with around 1,500 more sellers than buyers as of April, giving purchasers room to negotiate despite stubbornly high prices and mortgage rates.
  
  
• Cleveland, Ohio is one of the few true seller’s markets with median home prices about 68% below the national average and strong seller leverage.
  
  

Texas Housing News:

• Princeton, Texas, has become the fastest-growing U.S. town under 37,000 residents, attracting buyers with a median home price of $337,000.
  
  
• Texas lawmakers are looking at changing zoning laws to make it easier to build affordable housing. The goal is to limit how much small groups can block rezoning plans.
  
  
• McAllen, Texas ranked #1 in the nation for first‑time home buyers in 2025 thanks to a median sale price of $204,500, strong affordability, and steady inventory, making it a standout launchpad for newcomers.
  
  
• Helotes, Texas is getting 30 new build-to-rent duplexes at around $1,999/month through a $12.8 million project aimed to ease local rental strain.
  
  

Southeast Region Housing News

• East Tennessee is experiencing the highest housing inventory levels since the pandemic, which could help ease home prices over time.
  
  
• Atlanta, Georgia's housing market is 'rebalancing' as inventory surges nearly 50% year-over-year and sellers offer more concessions. April sales dropped 5.4% annually, while prices edged up 1.2% to $410,000—signs the market is shifting slightly in favor of buyers.
  
  
• South Florida’s housing market is showing signs of cooling, with listings sitting on the market for about 90 days, up from 60 just a few years ago.
  
  
• Tennessee ranks among the top 10 most-searched states for relocation in Q1, with Knoxville, Franklin, and Chattanooga being the most searched cities for relocation in TN.
  
  

Southwest Region Housing News:

• Denver, Colorado buyers had more choices in May, with active listings up 31.9% year-over-year and new listings rising 14.45% month-over-month.
  
  
• The median home price in New Mexico has decreased by 2% year-over-year to $345,100, with homes now averaging 77 days on the market, up from 57 days the previous year.
  
  
• Construction is underway on a new $87.4M development that will bring 199 affordable units to Reno, Nevada, replacing the obsolete Hawk View Apartments.
  
  
• Utah’s largest home is hitting the auction block. 'Lazy R Ranch' is a $34.5M, Disney-themed estate with tunnels, a “pool barn,” and a 42-seat dining table. 
  
  

Pacific Northwest Housing News:

• As of May 7, Washington has new rent control laws capping annual increases at 7% plus inflation or 10% max—whichever is lower. The law applies to single-family homes and sets a separate 5% cap for manufactured homes.
  
  
• In the first quarter of 2025, 71.3% of home sellers in the Seattle metro area offered financial concessions to attract buyers, a significant rise from 36.4% the previous year.
  
  
• Bend, Woodburn, and McMinnville are currently leading the state with the fastest-growing home sale prices in Oregon.
  
  
• The most affordable Wyoming towns for first-time home buyers in 2025 are:

  1. Cheyenne (~$280,000)

  2. Casper (~$260,000)

  3. Rock Springs (under $250,000)

California Housing News:

• Affordability in California improved slightly in Q1 2025, with 17% of households able to afford a median-priced single-family home, up from 15% in Q4 2024.
  
  
• The median home price in California dipped 3.1% quarter-over-quarter to $846,830, helping offset high mortgage rates.
  
  
• Zown, a real estate tech platform, just launched in California offering buyers an upfront down payment boost (up to 2%) to help them compete in the state’s tough market.
  
  
• Zillow projects that home prices in the L.A.-Orange County metro area could drop by 2.4% by March 2026, largely due to rising inventory levels.
  
  
• California is launching the CalAssist Mortgage Fund on June 12, offering up to $20,000 in mortgage relief to homeowners whose properties were destroyed or severely damaged by disasters like the Palisades and Eaton fires. The grant covers up to 3 months of mortgage payments and is paid directly to participating mortgage servicers.

Be sure to check back next month for our updated insights and trends to keep you informed on the latest developments. In the meantime, if you’re thinking about buying, selling, or refinancing, our Home Loan Specialists are always ready to help you make the right move.