U.S. Housing Market Faces Significant Price Drops, Increased Inventory

In early 2025, the U.S. housing market continues to show mixed signals as home prices remain elevated, with the typical home value reported at $355,328, a 2.7% increase from the previous year. However, inventory is on the rise, with a 24.6% increase in homes for sale from a year earlier, providing buyers with more choices. Despite this increase in inventory, existing home sales are still historically low, with January sales at 4.08 million, down from December but showing a year-over-year increase for the fourth consecutive month. Markets such as Austin, Denver, and Miami have experienced price corrections as inventory returns to pre-pandemic levels. Additionally, homes are taking longer to sell, with the Salt Lake metro area reporting a median of 52 days on the market. Overall, as inventory grows, buyers may gain more negotiating power amidst these ongoing price dynamics.