May 2025 Housing Market Headlines Are Confusing—Here’s What First-Time Buyers Need to Know
If you’ve been scanning news sites, social media, or your favorite real estate app for a May 2025 housing market update, you’re probably seeing chaos: price hikes here, inventory shifts there, and mortgage rate predictions that seem to change daily. For first-time homebuyers, it’s easy to feel like the market is spinning out of control.
But underneath the noise, there are clear trends—and understanding them can give you the power to plan. In this article, we’ll cut through the contradictory headlines to explain what’s really happening with home prices, inventory, and mortgage rates across the U.S., with examples from Florida, Wisconsin, and the East Coast. If you’re waiting for a “perfect moment,” this housing market update will show you why clarity and preparation matter more than timing.
If you are looking for specific information, like how the trade war and construction tariffs are playing a factor in the housing market today, you can check out this article explaining the impact of the tariffs and recent economic uncertainty on future home prices.
Why the housing data looks so contradictory right now
The latest reports seem to conflict at every turn. National existing home sales are down one week, but pending sales are spiking the next. Mortgage applications are falling, even as rates tick slightly downward. What gives?
This volatility is real, but it reflects short-term shifts, not long-term direction. When you’re hearing that “prices are slowing,” it doesn’t mean they’re falling. It means they’re still rising, just more gradually than during the post-2020 boom.
“It’s an unclear headline because it says that things are slowing, but it’s not slowing. It just means that we’re decelerating.”
— David Sidoni
The truth behind rising home prices in 2025
According to the National Association of Realtors, the national median existing home price hit $403,700 in March 2025, up 2.7% from the year before—an all-time high for the month. That’s not a crash. That’s slow, steady appreciation.
For buyers, this means:
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Don’t expect a huge discount anytime soon.
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But also, you’re not being priced out overnight like in 2021–22.
Planning with this realistic outlook can help you act smart when the right home appears.
Housing Inventory Trends in May 2025: Still a Seller’s Market
One of the most important pieces of this May 2025 housing market update is inventory—or more specifically, the lack of it. Despite some year-over-year improvement, housing supply remains low nationwide.
What “months of supply” actually means
You’ll often hear experts refer to the “months of supply.” This metric tells us how long it would take to sell every available home if no new listings came on the market. Here’s what it means:
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0–4 months = Seller’s market
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5–6 months = Balanced market
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7+ months = Buyer’s market
As of April, the U.S. sits at 4 months of supply, meaning we’re still in a seller’s market—though less extreme than the past few years.
“Inventory is improving… but it still only took us from a super seller’s market to the potential of a regular seller’s market.”
— David Sidoni
Regional updates from Florida, Wisconsin, and the East Coast
Real estate is local, and regional differences matter:
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Florida: Inventory is up 10.8%, but prices on condos are down 4.5%—largely due to insurance and HOA issues.
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Wisconsin: Inventory is even tighter, with only 3.2 months of supply and prices jumping 7.3% in Q1.
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East Coast (New England): Active listings up 31.8% year over year—the highest in 3+ years. 9% of listings saw price cuts.
Nationwide, 18% of all listings had a price cut in April, but don’t be fooled: many of those homes ended up in bidding wars once they hit the “right” price.
Mortgage Rates in 2025: Stop Waiting for the Perfect Time to Buy
Let’s address one of the biggest myths in real estate right now: that mortgage rates will “go back to normal.”
Why 3% mortgages aren’t coming back
The average mortgage rate since 1970 is 7.7%. Those 2–4% rates in the early 2020s? That was a one-time economic stimulus—not a baseline.
“What you actually saw with those rates was an artificial creation… you’re probably not going to see them again.”
— David Sidoni
For most of 2025, rates have stayed between 6.5% and 7%, even as the broader economy fluctuates. That kind of stability—even at a higher level—is more helpful than trying to guess when the next dip will come.
How to plan around 7% interest rates
Here’s the smarter approach: assume 7% is your baseline. Anything lower is a bonus.
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Build your rent replacement strategy based on today’s rates
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Look into strategies like interest rate buydowns or assumable loans
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Work with a lender who can help you improve your credit and qualify for better programs
“Don’t get pre-approved based on today’s rate. Build a strategy to find the best rate when you’re ready.”
— David Sidoni
Buying a Home in 2025: What First-Time Buyers Should Expect
If this May 2025 housing market update feels like a mixed bag—it is. But first-time homebuyers can still win if they’re strategic, realistic, and persistent.
Price cuts can still lead to bidding wars
Just because a home’s price drops doesn’t mean it’s a bargain. In many markets, that lower price sparks multiple offers, pushing the final sale price back above asking.
“I’m hearing… once that price gets to the correct pricing, the bidding wars begin… as much as $25K, $50K, even $100K over list price.”
— David Sidoni
Stay patient and work closely with your team to evaluate true market value—not just list price.
Use the 4 P’s to stay competitive: Patience, Persistence, Perseverance, Positivity
Buying your first home in a tight market can feel like an uphill battle. The way through isn’t to wait for the stars to align—it’s to plan and act with consistency.
“There are four P’s for the 2025 first-time homebuyer market: Patience, Persistence, Perseverance, and a Positive Attitude.”
— David Sidoni
Conclusion: Your Strategy Matters More Than Market Timing
The May 2025 housing market is complex—but not impossible. Prices are still rising, inventory is tight but improving, and rates have stabilized at higher levels. For first-time homebuyers, the biggest risk isn’t buying at the wrong time—it’s failing to plan while waiting for perfect conditions that may never come.
Start building your strategy. Educate yourself. Find a trusted team. Because even in a seller’s market with 7% rates, you can do this.
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