June Housing Market Report: The Market’s Shifting—Here’s What That Means for Buyers

Home buyers are finally catching a break—but it's complicated.

Inventory is up. Sellers are cutting prices. Homes are sitting longer. And in some areas, buyers are gaining negotiating power we haven’t seen in years. But that doesn’t mean the market is suddenly affordable. High mortgage rates and inflation pressures are still holding a lot of people back.

So what’s really happening in the market now? Here's what the latest numbers from Zillow, Redfin, the National Association of Realtors (NAR), and housing analyst Steven Thomas are showing.

Steven Thomas: All Eyes on Inflation

Steven Thomas kept it short this month. His main point: the Fed is watching inflation reports closely. This week’s PPI and CPI numbers—and next week’s Federal Reserve meeting—will set the tone for whether rate cuts are still on the table for 2025. Until inflation slows significantly, don’t expect lower mortgage rates.

Zillow: Inventory Rises, Buyer Competition Drops

Zillow’s May data shows a market moving closer to balance. Inventory is up 20% from a year ago, giving buyers more choices and breathing room. Competition is easing too. Price cuts hit a May high, and fewer homes are selling above asking—only 30% in April compared to 33% a year earlier.

Home values dropped in 22 of the 50 largest metro areas, but still rose in the other 28 metros. Monthly mortgage payments are slightly down from last year, but affordability remains tight. For many first-time buyers, renting is still cheaper than buying—even after a 10% down payment.

In fact, renting a typical single-family home now costs about $100 less per month than owning the median home. That’s a big shift from just six years ago when buying was the cheaper option. It helps explain why demand for homes continues to hover at the bottom, even with rising inventory.

Zillow projects a 1.4% dip in home values this year and a small bump in home sales, which are expected to reach 4.14 million in 2025—up just 1.9% from last year.

Redfin: Smaller Down Payments, More Buyer Leverage

Redfin’s latest data shows more signs that the market is cooling. Only 28% of homes sold above asking price this spring—the lowest springtime level since 2020. Sellers are outnumbering buyers in many markets, which is giving buyers more leverage and forcing sellers to offer concessions or accept lower offers.

One big trend: the average down payment has dropped for the first time in nearly two years. The typical buyer put down $62,468 in April—down 1% from last year. At the same time, more buyers are using FHA and VA loans, which require smaller down payments. Together, they now account for over 22% of mortgaged home purchases.

Affordability is still the biggest hurdle. Mortgage rates are hovering near 7%, and the median sale price is now sitting about 7% below the median list price—indicating a clear shift in power toward buyers. According to Redfin, 31% of home purchases are still all cash, but that’s slightly down from last year as mortgage-backed deals pick up again.

NAR: Rates Are Still the Bottleneck

NAR Chief Economist Lawrence Yun sees slow progress. He expects home sales to rise 6% this year and another 11% in 2026, with home prices up 3% in 2025. But he’s also clear that mortgage rates remain the biggest obstacle. Rates are projected to average 6.4% in the second half of this year—down from recent highs, but still tough for new buyers.

Yun emphasized that shelter costs are still keeping inflation higher than the Fed would like. But there’s some good news: job growth is strong, wages are outpacing inflation, and more renters say they want to buy a home as soon as they can afford it.

Until rates fall and inflation cools, affordability will remain a problem. Still, rising mortgage applications could mean more activity is coming in the second half of the year.

Key Takeaways

• The typical U.S. home value in May was $366,289, with a monthly mortgage payment of $1,922 (assuming 20% down).
• Rent for a typical single-family home is $100 cheaper per month than buying the median-priced home—even after a 10% down payment.
• The median time on market for homes that sold in May was 17 days—longer than last year, but still faster than pre-pandemic averages.
• New listings were up 4.5% year-over-year in May, but still 20% below pre-pandemic levels.
• 25.8% of homes had a price cut in May—the highest rate for that month in Zillow’s records going back to 2018.
• Nearly 35% of rental listings offered concessions in May, such as free rent or reduced deposits—a record high for that month.

Why We Share These Reports

We believe knowledge leads to smarter financial decisions. That’s why we break down the data each month—to help you see what’s  factual, not just what’s in the headlines.

Whether you’re thinking about buying, renting, or just planning your next move, we’re here to help you navigate through it all with confidence.