AUSTIN – (By Dale King, Realty News Report) – “Cruel Summer” is the title of a TV series, a movie and pop songs by such performers as Taylor Swift and UK girl group Bananarama.
It’s also the name of Realtor.com’s newly released analysis of residential sales activity – or apparent lack of it — during the past three months. The document, called “Cruel Summer: Why the U.S. Housing Market is Stuck,” offers a frank explanation of what many see as a dearth of recent home buys, sales and construction.
“Buyers, sellers, and builders are all facing different challenges, yet all are united by one common experience: frustration,” the Realtor.com report says.
“The housing market is caught in a collective slowdown, touching everyone from buyers to sellers to builders,” said Realtor.com senior economist Jake Krimmel. “Despite facing different pressures, each group is reacting the same way, with hesitation and retreat. The result is a market that can’t gain meaningful traction.”
In truth, the study isn’t all that bad nor all that cruel. From the hesitancy in buying, selling and building, “a more balanced market is emerging, creating opportunities for those with the patience and flexibility to adapt.”
In the report, Krimmel touches on data well known to real estate pros and folks looking to buy or sell domiciles.
“Home sales remain near multi-decade lows, despite 21 consecutive months of rising inventory,” he said. “In fact, inventory has grown 28 percent this summer alone (May – July 2025), reaching more than a million homes for three straight months, and reaching the highest levels since November 2019.”
In addition, “prices have stabilized in many regions, but elevated mortgage rates and economic uncertainty are keeping both buyers and sellers on the sidelines.
Across the board, stakeholders are pulling back, leading to a housing market defined less by crisis and more by a collective pause.”
Buyers: Prices still high
For buyers, affordability is still a major difficulty. The national median list price of a home remains near $440,000, relatively unchanged since 2022, while mortgage rates have climbed, pushing monthly payments significantly higher. Compared to 2019, today’s buyers are paying over $1,200 more per month for a median-priced home, with costs increasing due to both price growth and higher interest rates.
While incomes have grown, they have not kept pace with the increased cost of homeownership. Even in markets where prices have fallen, the “double whammy” of high rates and price appreciation has kept buying power low and sidelined many would-be purchasers.
In its recent “Buying Power Report,” Realtor.com found that only 28 percent of homes on the market are priced within reach of the typical household earning the U.S. median family income of $78,770.
Sellers: Leverage shifted
In the report, Krimmel said “sellers are also navigating an interesting landscape. Although demand has cooled, many homeowners remain reluctant to lower prices. Instead, many are choosing to delist their homes entirely rather than budge on the price they have in their mind. The delisting-to-new listing ratio climbed to 0.21 in June 2025, up from 0.13 in May, meaning for every 100 new listings, 21 were removed without a sale. In some metros, the ratio was even higher, such as Miami, where the delisting ratio was 59 per 100 new listings.”
This market situation combined with a recent downturn in new listings, “is slowing the pace of inventory growth. Sellers’ resistance to price adjustments is contributing to stalled transactions and keeping prices elevated, further compounding affordability issues.”
Builders: Activity slow, demand weak
Builders, too, feel the pressure. Single-family home construction is down, permits are falling, and the pipeline of new builds is shrinking. In June 2025, permits rose by 0.2 percent month over month but were 4.4 percent lower than last June. Starts rose by 4.6 percent from May 2025 but were still lower than in June 2024 (-0.5 percent).
Factors like high financing costs, weak buyer demand and new tariffs on building materials make developers increasingly careful. This pullback comes at a bad time — when the country is still short of the estimated four million homes needed to stabilize the market. Builders are essential to solving this long-term supply gap, but current conditions make it tough to justify new projects.
Regional fragmentation
Adding intricacy to the picture is a stark regional divide. In the South and West, supply has outpaced demand, leading to slower sales and price declines. As of July 2025, the South led the nation in housing supply, accounting for more than 50 percent of both new and existing home listings, outpacing its 39.4 percent share of U.S. households.
By contrast, the Northeast and Midwest remain tight markets, with resilient demand and limited inventory continuing to drive competition.
“This regional fragmentation,” said Krimmel, “makes it harder to interpret national trends and underscores the importance of localized strategies for buyers, sellers, and policymakers.”
Outlook: A pause, not a crisis
Despite these challenges, the housing market is not in crisis, says the Realtor.com report. Most homeowners are sitting on substantial equity. Many are locked into low interest rates. And while the pace of activity has slowed, the underlying fundamentals remain intact.
Fortunately, the American economy has shown incredible resilience over the past several years, setting the stage for steady progress. Inventory continues to rise, builders will add supply, and as interest rates begin to ease and market participants adjust their expectations, conditions for a healthier, more balanced market may gradually emerge.
Sept. 5, 2025 Realty News Report Copyright 2025
Photo credit: CALpix, copyright Realty News Report 2025
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File: Housing Market Stuck in a ‘Cruel Summer’ Affordability Housing Market Stuck in a ‘Cruel Summer’ Realtor.com