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Grant Brissey
June 27, 2025
3 Minute Read
With the selling season well underway, some optimistic expectations for 2025 are giving way to a reality that looks very similar to 2024. Though qualified buyers are seeing more conditions shift to their advantage.
Amid geopolitical conflict, erratic tariff policy, and slowing job growth, mortgage rates hover a shade lower than they did a year ago. As many expected, the Fed elected to hold its benchmark rate during its June meeting, though there are signs that may change in July. Either way, Zillow predicts mortgage rates will finish 2025 near the mid-6% range.
MoM home values climbed in 36 of the 50 largest metro areas in May. Gains were biggest in Buffalo (1.7%), Cleveland (1.7%), Milwaukee (1.5%), Hartford (1.4%), and Pittsburgh (1.4%). Nationally, a surge in listings helped boost sales in May 3.5% over April, and up 0.9% YoY.
But while buyers face familiar affordability challenges, the national market is approaching more of a balance. “Potential buyers have more bargaining power than they’ve had in years,” says Zillow Senior Economist Orphe Divounguy.
Buyers get more options leading to record price cuts
With YoY inventory up nearly 20%, buyers had more options in May than at any time since July 2020. That’s helping to fuel price cuts: 25.8% of listings in May saw one — up from 23.8% last May.
The share of listings with a price cut has been growing for the last few months, and the May figure sets a record dating back to 2018.
“For your sellers, the stakes are sky-high,” says Divounguy. “There’s not much of a middle ground anymore, so getting your price strategy is crucial. Having an honest conversation early on, and coaching clients with the latest local market data may help.”
Tip: Get your market’s housing data here.
Engaged Shoppers per Listing shows competition varies by market
Further tipping the field in favor of buyers, competition — as measured by Zillow’s Market Heat Index — in May declined to the lowest level seen in Zillow records, which reach back into 2018.
Although sellers outnumber buyers, pent-up demand remains elevated — highlighting the magnitude of the affordability challenge. A Zillow analysis found that nationally there were 5.5 engaged shoppers per listing on Zillow.
Where there are more shoppers per listings, homes sell faster and price growth remains relatively elevated. Competition varies by market, with home shoppers in Sun Belt metros more likely to encounter less competition, while parts of the Northeast were likely to see stronger competition and tighter timelines for potential buyers. Buffalo, the most competitive market, sees almost five times as many engaged shoppers — people who have saved or shared a for-sale listing on Zillow — per listing than the least competitive market, Miami.
For seller clients in less competitive markets, consider checking their listings against Zillow’s Elements of a High-Performing Listing.
Luxury still leads on price growth
The luxury segment is more insulated from affordability challenges. But even luxury buyers had to contend with the economic uncertainty headwinds in April.
The typical value of a luxury home — defined here as the top 5% most valuable homes in each region — rose 2.7% YoY in April — more than twice the pace of the broader market.
Luxury home values increased most on a year-over-year basis in Cincinnati (7.3%), Columbus (6.8%), Chicago (6.3%), Cleveland (6.1%) and Las Vegas (6.1%). Luxury homes in Cincinnati and Columbus are typically going under contract after just five days. On the other end, Austin (-2.1%), Tampa (-1.7%) and Miami (-0.5%) are the only major markets where luxury home values have declined.
Although price growth has been relatively stronger for higher-end homes, the luxury housing market also tapped the brakes in April as financial markets volatility led both buyers and sellers to hit pause.
A slight recovery in consumer confidence in May, coupled with stock market gains that erased March and April losses, could support a modest late-season increase in home sales. Zillow still forecast sales could rise above 2024 levels.
