After housing market cycles defined by extreme shortages, rapid price appreciation and frenetic buyer competition, this year delivered something closer to balance. Inventory climbed meaningfully, price growth flattened and homes took longer to sell — signs of a market settling into a more sustainable rhythm.
Using data through Dec. 20, here’s how the housing market performed nationally and what defined the year.
National snapshot: Balanced, with a slight seller edge
At the national level, key housing indicators show a market that cooled without breaking:
- Median list price: $419,950 (up 0.2% year over year)
- Price per square foot: $209 (down 1.0% year over year)
- Days on market: 84 days (up 9.1% year over year)
- Market Action Index: 33.5 (down 4.1% year over year), indicating a slight seller’s market
- Active inventory: 757,763 homes (up 16.4% year over year)
- Months of inventory: 2.8 months
- Price reductions: 39% of active listings
While the Market Action Index still indicates a slight seller advantage, the overall picture reflects growing equilibrium. Buyers had more options, sellers faced more competition and pricing power softened without collapsing.
Inventory made its comeback
One of the most consequential shifts of 2025 was supply. Active inventory rose more than 16% year over year, marking one of the largest annual increases since the pandemic-era housing crunch.
That additional supply helped relieve pressure on prices and slowed transaction velocity, pushing days on market higher nationwide.
Even so, absorption remained healthy. Through 51 weeks of data:
- Total new listings: 3.19 million homes
- Total sales (absorbed): 4.03 million homes
- Average inventory: 773,784 homes
Demand didn’t disappear — it simply became more selective.
The hottest markets weren’t where you might expect
While much of the market cooled, several metros continued to post exceptionally high levels of buyer demand relative to supply.
Top metro markets by Market Action Index
The Market Action Index (MAI) measures the balance between supply and demand by combining pricing trends, inventory levels and days on market. Higher MAI values indicate stronger seller leverage, while lower values reflect increased buyer negotiating power.
- Greenville, N.C. — MAI: 70.9 | Median: $339,900 | Days on market: 77
- Manchester-Nashua, N.H. — MAI: 70.2 | Median: $622,450 | Days on market: 49
- Reading, Pa. — MAI: 67.1 | Median: $424,900 | Days on market: 49
- Rochester, N.Y. — MAI: 61.8 | Median: $234,900 | Days on market: 56
- San Jose-Sunnyvale-Santa Clara, Calif. — MAI: 58.3 | Median: $1,698,000 | Days on market: 63
At the state level, New England dominated, with Rhode Island, New Hampshire, Massachusetts and Connecticut leading the country in market heat.
Top state markets by Market Action Index
Where the money moved
When measured by total dollar volume, the largest markets continued to do what they do best: move massive amounts of real estate.
Texas metros stood out for combining high transaction volume with some of the nation’s largest active inventory pools — a reminder that scale remains a defining feature of those markets.
The highest price points stayed coastal
Despite broader cooling, the nation’s priciest markets remained concentrated in coastal and resort metros.
- Santa Barbara-Santa Maria-Goleta, Calif. — $2,792,500 median
- San Jose-Sunnyvale-Santa Clara, Calif. — $1,698,000 median
- Honolulu, Hawaii — $1,437,500 median
- Napa, Calif. — $1,424,500 median
- Los Angeles-Long Beach-Santa Ana, Calif. — $1,400,000 median
The fastest markets were quietly efficient
Speed didn’t disappear — it just shifted. Several affordable Midwest markets moved homes quickly, with days on market near six weeks or less.
- Springfield, Mo. — 35 days | Median: $318,613
- Jefferson City, Mo. — 42 days | Median: $322,950
- Saginaw-Saginaw Township North, Mich. — 42 days | Median: $159,900
- Decatur, Ill. — 42 days | Median: $149,400
- Bloomington-Normal, Ill. — 42 days | Median: $299,900
What defined 2025
Across the board, the same themes emerged:
- More supply, less urgency: Inventory growth gave buyers leverage and time.
- Stable prices, softer pressure: Prices held steady nationally, but price per square foot declined.
- More realistic sellers: Nearly 4 in 10 listings saw price reductions.
- A return to normal: The market moved away from extremes toward equilibrium.
How to use this data
The 2025 housing market rewarded precision over momentum. Inventory growth, flatter prices and longer days on market shifted leverage toward informed buyers and well-prepared sellers.
- Use inventory trends to set expectations: With supply up more than 16% year over year, pricing accuracy and presentation matter more than speed alone.
- Lean on MAI for local leverage signals: Higher MAI markets still reward decisive action, while lower readings call for flexibility and negotiation strategy.
- Adjust timelines using days on market: Longer marketing times should shape client conversations and transaction planning.
- Watch price reductions as opportunity signals: With 39% of listings cutting prices, reductions can indicate leverage shifts and negotiation windows.
- Pair national context with local insight: National normalization masks wide local variation — local data remains the differentiator.
Looking ahead
By the end of 2025, the housing market had largely reset expectations. This wasn’t a year of explosive growth or dramatic declines — it was a year of recalibration.
For housing professionals, the takeaway is clear: Success in this environment depends less on riding market momentum and more on pricing accuracy, local expertise and understanding where demand remains resilient.
After several years of whiplash, 2025 offered something rare — a housing market that behaved like one.
HousingWire used HW Data to source this story. To see what’s happening in your own local market, generate housing market reports here. For enterprise clients looking to license the same market data at a larger scale, visit HW Data.
