The Market Is Shifting—Here’s What You Need to Know About the Second Half of 2025

We’re officially past the seasonal peak for home sales and pricing here in Silicon Valley—and frankly, across the country too. If you’ve been paying attention, this happens every year like clockwork: activity builds through spring, crests around late June, and starts to taper off in the second half of the year. Fewer new listings hit the market, fewer homes go into contract, and those that do often sell for a bit less than they would have just a month or two earlier.

So, what’s happening in the market right now, and where are things likely headed as we head into fall?

Let’s take a look at the data—and I’ll explain what it means if you’re thinking about buying, selling, or just trying to make sense of your next move.

Sales Volume Is Finally Picking Up

After a sluggish start to the year, we’re finally seeing signs of life. For months, home sales were even slower than they were in 2024—which, let’s be honest, wasn’t a stellar year either. But since late May, weekly pending sales (that is, homes going under contract) have been up year-over-year. We’re averaging around 67,000 single-family homes going into contract per week—up from 63,000 during the same period last year. That’s about 5% growth, which is real, measurable progress.

This shift should show up in the national sales numbers reported in late July and August. In fact, I wouldn’t be surprised if we start seeing positive year-over-year sales headlines again soon—a welcome reversal from the doom-and-gloom stories we’ve been seeing all year.

But Inventory Keeps Climbing

At the same time, inventory is on the rise. Right now, there are just under 1.1 million homes for sale nationwide—about 857,000 of them are single-family homes, and the rest are condos. That’s 28% more inventory than we had a year ago. This is partly due to mortgage rates staying high (around 7%), which keeps some buyers on the sidelines and prevents listings from getting scooped up quickly.

We typically see inventory peak in October, and this year looks no different. Unless mortgage rates fall (which could trigger a rush of demand), we can expect unsold homes to continue building over the next few months.

New Listings Are Up Slightly—But Still Below Normal

Seller activity has picked up a bit compared to last year. This past week, around 73,000 single-family homes were listed, plus another 15,000 condos. That’s better than 2024, but still about 15% fewer new listings than we’d expect in a pre-pandemic summer. Translation? There are still a lot of homeowners choosing to sit on the sidelines, especially if they locked in a 3% mortgage during the refi boom.

If mortgage rates were to drop meaningfully, demand would likely spike faster than supply—and inventory might not build up as much. But for now, sellers remain cautious.

Home Prices: Flat, With a Chance of Slipping

Here’s the part that gets a little murky. Nationally, home prices are just barely up over 2024—about 1% growth year-over-year. But that growth is losing steam fast. Based on leading indicators (like the price of homes going under contract this week), prices may actually turn negative later this year.

The median price for a single-family home in the U.S. right now is $395,000, down from this year’s peak of $400,000. If demand remains weak and mortgage rates stay high, I wouldn’t be surprised to see that number dip further in the fall.

We’re already seeing signs of price sensitivity: nearly 42% of active listings have had to reduce their asking price. Buyers aren’t rushing in with offers—they’re willing to wait, and when they do make a move, they’re shopping for deals.

What Does It Mean for Buyers and Sellers?

If you’re thinking of selling, the next couple of months could be your last chance to catch the tail end of summer demand. Buyer activity tends to drop off in the fall, especially if interest rates stay where they are. And if you’re seeing more price reductions in your neighborhood, that’s a signal: overpricing right now is risky.

If you’re a buyer, you might find yourself with more choices and a bit more negotiating power in the months ahead. But don’t expect a fire sale—there’s still a lot of pent-up demand, and if rates dip even slightly, competition could ramp up quickly.

Final Thoughts

After a weird few years in real estate (remember 2020-2022?), it looks like the narrative is starting to shift again. For a while, we had falling home sales and rising home prices. Now, we may see the opposite: rising home sales and falling prices.

As always, your best move depends on your specific goals and timing. If you want to talk through what all this means for your situation, I’m happy to help. Whether you’re buying, selling, or just planning ahead, let’s have a real conversation about how to make the market work for you.