Housing Inventory & Home Prices in 2025: What Seasoned Mortgage Pros Need to Know

As we navigate the middle of 2025, mortgage professionals are again finding themselves balancing between market volatility and cautious optimism. After several years of pandemic-driven disruption, double-digit home price growth, and whiplash-inducing rate changes, many in the industry are asking: Where are housing inventory and prices headed now—and how should we respond?

If you’ve ridden the highs and lows of previous housing cycles, this market feels different—and for good reason. Let’s explore the most recent shifts and what they mean for you, your pipeline, and your borrowers.

Inventory Rebounds—But It’s Complicated

According to FNBO and other housing economists, new-home sales and single-family housing starts are projected to grow by 13.8% over 2024. This sounds promising—and it is—but context matters.

Builders are cautiously optimistic, encouraged by slight rate dips and longer time-on-market windows. However, this resurgence is highly regional. Inventory gains are most visible in Sunbelt states and suburban metros where land availability, population migration, and builder incentives align. In contrast, high-cost coastal cities and many Midwest metros are still seeing tight supply.

Why this matters for you:
Clients may come in expecting a national trend, but your ability to translate that into hyperlocal insights will determine your value. Lending professionals who can speak fluently about regional inventory outlooks (and their financing implications) will earn trust and repeat business.

Price Growth Is Cooling—But Not Crashing

Gone are the pandemic-era bidding wars (mostly), but don’t expect a price plunge either. Nationally, home prices are forecasted to grow between 2% and 5% in 2025, a modest but healthy pace. That’s a sharp contrast to the double-digit annual spikes we saw in 2021–2022.

Several forces are keeping prices elevated:

• Persistent inventory shortages in many markets

• High renovation costs, which discourage listing

• “Rate-locked” homeowners unwilling to sell due to their sub-4% existing mortgages

This combination creates what some analysts call a “frozen” market—more homes are coming online, but not enough to offset years of undersupply.

Pro tip:
This environment calls for borrower education. Help clients reframe “overpriced” properties in terms of long-term equity and purchasing power, especially if rates ease later this year.

Market Nuance Is the Mortgage Pro’s Advantage

If the last few years taught us anything, it’s that one-size-fits-all advice no longer applies—if it ever did. Seasoned professionals should lean into local expertise, niche lending products, and real-time data.

Ask yourself:

• How can I guide buyers who are unsure whether to act now or wait?

• Are there lending solutions that make today’s prices more accessible (e.g., buydowns, ARMs, bridge loans)?

• Am I tracking builder incentives, appraisal adjustments, and new zoning rules that affect local inventory?

The shift we’re seeing isn’t just statistical—it’s strategic. Your borrowers want clarity. It’s up to you to turn national trends into actionable guidance tailored to their situation.

The “New Normal” Isn’t Static

It’s tempting to seek a return to “normal”—but today’s market may be laying the foundation for a different normal. Consider these emerging trends:

• Millennials and Gen Z are now the dominant first-time buyer cohorts, often prioritizing affordability over square footage or location.

• Accessory dwelling units (ADUs) and multi-generational homes are on the rise as families pool resources.

• Remote work trends continue to shift demand from urban centers to tertiary markets.

The takeaway? Inventory may be rising, and prices may be steadying—but what people are buying and why is evolving. Your role is no longer just transactional; it’s advisory.

Stay Sharp in a Shifting Landscape

Even experienced professionals benefit from refreshing their perspective. Market shifts don’t just affect homebuyers—they impact how we approach our business.

Whether you're recalibrating your pitch to hesitant clients or exploring niche loan programs to stay competitive, staying informed is your best defense against uncertainty. The mortgage space moves fast, and education helps you keep pace with the tools, trends, and tactics shaping our industry.

Explore Mortgage Knowledge’s full course catalog to stay sharp, stay compliant, and stay ahead.

Final Thought: Navigate With Confidence

As 2025 unfolds, remember that your experience gives you an edge—but only if it evolves with the market. Housing inventory and pricing trends will continue to shift, but those who understand the why behind the numbers—and act on it—will be the most valuable players in the room.

So don’t just watch the market—guide your clients through it. Your role has never been more essential.