Home Values Are Starting To Erode as Weak Sales Continue

After months of sluggish summer sales, the housing market is feeling the drag, pushing down underlying home values—but also opening the door for would-be buyers this fall.

For the week ending Sept. 20, 2025, the median list price held steady year over year, continuing a seven-week trend of flat or falling prices, according to the latest weekly housing market trends report from Realtor.com®.

Over the same period, the price per square foot—which accounts for home size—dropped 0.5% from a year ago for the second straight week, ending nearly two years of consistent growth and sounding warning signals for the market.

"The weak sales activity has finally caught up and stalled out this metric, suggesting underlying home values are starting to soften," explains Realtor.com economist Jiayi Xu.

Although mortgage rates have retreated toward the lower end of 6%, homeowners have been in no rush to list their properties—not a huge surprise given that 81% of existing mortgages are still locked in below the 6% level.

At the same time, stagnant prices and longer days on market for listed homes suggest that even 11-month-low interest rates have not been enough to entice hesitant buyers waiting on the sidelines.

As of Thursday, the average rate on 30-year fixed home loans ticked up to 6.3% from 6.26% the week before, following remarks by Federal Reserve Chair Jerome Powell that tempered hopes for additional rate cuts in 2025 after this month's quarter of a point reduction, the first in nine months.

Inventory goes stale as new listings plunge

New listings—a measure of owners putting homes up for sale—plunged 1.9% last week on an annual basis, marking the second decrease since April 2025.

"This softening trend suggests that national inventory gains have stalled as sellers pull back from listing their homes," says Xu.

As the "best time to buy" approaches in October, home shoppers may encounter more summer leftovers than a flood of fresh options.

But despite this setback, Xu says that fall still promises to be the most buyer-friendly market in nearly 10 years, with more overall inventory and sellers eager to get to the closing table.

The total number of listings active on the market increased 16.4% from the same time a year ago, continuing a 14-week trend of slowing growth.

However, last week was the 98th consecutive week of annual gains in national housing inventory. There were 1.1 million homes up for sale, marking the 21st week in a row over the million-listing threshold.

"If lower rates align with stable prices, buyers may find a rare sweet spot of opportunity," adds Xu.
"Those prioritizing price may benefit from waiting until later in the season, while those seeking more choice may want to act earlier."

Home sales slow down

The glacial pace of sales continued this week, as still-elevated home prices and mortgage rates above 6%, combined with general financial uncertainty and persistent affordability challenges, are preventing aspiring buyers from making a move despite an ample stock of listings.

The typical for-sale home waited seven days longer for a buyer last week compared with the same period in 2024, reflecting a slight market slowdown from the previous two weeks.

"Demand has fallen precipitously as a result of buyers' fear of losing their jobs and the general economic uncertainty in the market," Mario Greco, real estate agent and founder of the MG Group serving the Chicago metro, tells Realtor.com.

Notably, conditions vary greatly regionally. The West and South see relatively high inventory and a slow market pace, which is driving the national figure higher despite relatively tight conditions in the Midwest and Northeast.