Market Power Shifts to Buyers

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News Flash

Sellers Showing Hesitancy as Market Power Shifts to Buyers

The pendulum is finally swinging. After years of sellers calling all the shots, buyers are starting to gain some leverage in the housing market.

New listings increased just 6.3% year-over-year in the four weeks ending June 1 – one of the smallest gains in recent months.

Why are sellers pulling back? Homes are now typically selling for about 1% less than asking price – the biggest discount for this time of year since 2020.

Those stubbornly high mortgage rates continue to reshape buyer behavior and affordability calculations.

Builders are feeling the pressure too. A full 34% reported cutting prices in May, up from the previous month. This has narrowed the price gap between new construction and existing homes.

While home prices are still expected to rise in 2025, those increases will likely be capped by the current interest rate environment.

And the Investment Market Seems to be Stabilizing Also

Remember those wild pandemic swings in real estate investing? That rollercoaster appears to be leveling out.

Real estate investors purchased 46,726 homes in Q1 2025, reflecting a modest 2% increase compared to the same period last year. This measured approach signals a market finding its equilibrium after years of volatility.

The stabilization comes as analysts predict home prices will rise approximately 3.2% in 2025, though high mortgage rates will keep those increases in check.

Interestingly, REITs have emerged as surprise performers in early 2025, suggesting investors are finding value in real estate – just through different channels than direct purchases.

The shrinking price gap between new and existing homes adds another layer to the current market calculus.

The days of frenzied bidding wars may be fading, but the fundamentals still point to a real estate market that's finding its balance point. The question now: Is this the new normal, or just a pause before the next shift?

Sources: 1. [Source] 2. [Source] 3. [Source] 4. [Source]

More You Should Know

• Renters Gain Negotiating Power: As a significant number of new apartments remain vacant, renters are gaining increased leverage to negotiate concessions and more favorable terms in the evolving rental market. [Source]

• Housing Market Sees Regional Shifts: The Summer 2025 housing market is experiencing significant regional divergence, with Miami leading price gains at 9.4% year-over-year while formerly robust markets like Boise, Idaho, are seeing declines of 3.1%. [Source]

• Title Premiums Rise 7%: The title insurance industry saw a 7% increase in premiums, reaching $16.2 billion in 2024, with a strong 20.2% year-over-year growth in the fourth quarter, despite general real estate market challenges. [Source]

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