U.S. Housing Market Stalls Amid Rising Rates, Regional Supply Gaps

The U.S. housing market in 2025 is characterized by stagnation and affordability challenges, with both buyers and sellers exhibiting hesitation amid high mortgage rates and economic uncertainty. Despite a rise in inventory, home sales remain near multi-decade lows, as many potential buyers are priced out due to the combination of elevated home prices and mortgage rates hovering around 6.5-7%, requiring a significantly higher income than the typical household earns. Sellers are reluctant to lower prices, often choosing to delist homes rather than accept lower offers, which slows inventory growth and keeps prices elevated. Regional disparities exist, with the South and West experiencing high inventory but low demand, while the Northeast and Midwest face limited inventory and more competition among buyers. Builders are also impacted, with single-family home construction declining and fewer permits issued, contributing to the broader housing supply shortage. Locally, markets such as Burlington, Hamilton, and Oakville show mixed signals, but stable interest rates and increased buyer activity suggest potential opportunities in the fall season.