Market Tips Toward Balance as Inventory Rises and Competition Eases (May 2025 Market Report)
More stable economic conditions and a surge in available homes helped boost sales in May after a slow April. Buyers have more options and lower mortgage rates than last year. But sales remain sluggish compared to historical norms as buyers grapple with affordability headwinds.
Economic uncertainty in the wake of trade tariffs and losses in the stock market contributed to slower newly pending sales than expected in April, falling 2.5% from the year before. As tariff concerns eased and the S&P 500 rebounded in May, sales rose 3.5% over April, up 0.9% from last year.
With inventory up nearly 20% over the previous year buyers had more options in May than at any time since July 2020. Despite higher sales, sellers still outnumber buyers.
This gives buyers more time to decide and more power in negotiations. Zillow’s market heat index shows a balanced market nationwide, one that’s a lot more buyer-friendly than in recent years. Competition among buyers declined to the lowest level seen in May in Zillow records, reaching back through 2018.
Home values have fallen in 22 of the 50 largest metro areas over the past year, and sellers cut prices on almost 26% of listings nationwide — another May high in Zillow records. Homes that sell typically do so in 17 days, about four more than last year and only two days fewer than pre-pandemic averages.
Despite a less competitive for-sale market, renting a starter home makes financial sense — at least in the short term — for much of the nation. Rent for a typical single-family home is roughly $100 cheaper per month than the mortgage payment on the typical U.S. home, even after a 10% down payment. Six years ago, renting was $373 more expensive than buying. This shift helps explain why housing demand continues to bounce along the bottom.
Home values
- The typical U.S. home value is $366,289.
- The typical monthly mortgage payment, assuming 20% down, is $1,922.
- Home values climbed month over month 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%).
- Home values fell, on a monthly basis, in 10 major metro areas. The largest monthly drops were in San Jose (-0.8%), Miami (-0.4%), San Francisco (-0.3%), Austin (-0.2%), and Orlando (-0.1%).
- Home values are up from year-ago levels in 28 of the 50 largest metro areas. Annual price gains are highest in Cleveland (4.6%), New York (4.3%), Louisville (4.3%), Hartford (4.1%), and Providence (3.8%).
- Home values are down from year-ago levels in 22 major metro areas. The largest drops were in Austin (-5.5%), Tampa (-5.4%), Dallas (-3.4%), Phoenix (-3.4%), and San Antonio (-3.3%).
- The typical mortgage payment is down 1.7% from last year and has increased by 111.7% since pre-pandemic.
Inventory and new listings
- New listings increased by 4.8% month over month in May.
- New listings increased by 4.5% this month compared to last year.
- New listings are -19.8% lower than pre-pandemic levels.
- Total inventory (the number of listings active at any time during the month) in May increased by 7.4% from last month.
- The median age of inventory, the typical time since the initial list date for active for-sale listings, was 50 days.
- There were 19.6% more listings active in May compared to last year.
- Inventory levels are -20.7% lower than pre-pandemic levels for the month.
Price cuts and share sold above list
- 25.8% of listings in May had a price cut. That is up from 24.5% in April and 23.8% in May 2024.
- 30.1% of homes sold above their list price in April. That is up from 26.9% in March and compared to 33.3% in April 2024.
Newly pending sales
- Newly pending listings increased by 3.5% in May from the prior month.
- Newly pending listings increased by 0.9% from last year.
- Median days to pending, the typical time since initial list date for homes that went under contract in a month, is at 17 days in May, up one day since last month.
- Median days to pending increased by four days from last year.
Market heat index
- Zillow’s market heat index shows the nation is currently a neutral market.
- The strongest sellers markets in the country are Buffalo, Hartford, New York, Minneapolis, and Boston.
- The strongest buyers markets in the country are Miami, New Orleans, Jacksonville, Tampa, and Austin.
Rents
- Asking rents increased by 0.4% month over month in May. The pre-pandemic average for this time of year is 0.7%.
- Rents are now up 3.2% from last year.
- Rents fell, on a monthly basis, in three major metro areas. The largest monthly drops are in Tampa (-0.2%), Phoenix (-0.2%), and New Orleans (-0.1%), while Miami and Las Vegas held steady.
- Rents are up from year-ago levels in 47 of the 50 largest metro areas. Annual rent increases are highest in Cleveland (5.9%), Chicago (5.9%), Providence (5.9%), Columbus (5.3%), and Indianapolis (5.3%).