New Redfin Data Shows No Housing Crash! | U.S. Housing Market Update, September 15 2025

A crash in the national home price has been averted, for now, as the U.S. median home price headed higher in July. In today's video, I'm going to update you on the latest supply and demand data, what caused the rise in price, and the developments to keep our eye on in the months ahead that could lead to a turn in the housing market. Let's get into it. Welcome to Real Estate Watch, the channel that focuses on forward-looking real estate and economic analysis. We're looking at the U.S. housing market today, and the latest data from Redfin shows that we are still stuck in a stalled-out market that isn't showing any signs of a major breakout to the up or downside in terms of price. The U.S. median home price in July came in at $434,000 on a seasonally adjusted basis, up from $432,000 the month before, and a reversal of the trend of declining prices that was in place for most of the first half of the year. The reason for the July rise in price and reversal of the downward price trend we saw in the months prior is because of supply that is tightening once again. New listings ticked down in July, the fourth month in a row for lower new listings. Home sales were pretty much flat from the prior month and remain in historically low levels. Nevertheless, because sales are still taking place and there were fewer new listings to replace the inventory that has been taken off the market, supply is tightening, which we can see in the month's supply of homes that has decreased over the last two months. Demand remains weak as the sales-to-list price ratio has headed lower and homes are sitting on the market increasingly longer, as we can see from the average days on market, which set a new post-pandemic record high. It's a familiar story. Many buyers are priced out of the market given where prices and mortgage rates are at, but a tightening of supply is putting just enough pressure on prices so they don't fall further than what we saw happening for most of the first half of the year. Now, keep in mind that this is what is happening at the aggregate national level. Some regional markets could be showing different trends, but this is what we're seeing at the national level. I've said several times that what happens on the supply side of the housing market is going to be a big factor in determining what happens with U.S. home prices in the months ahead. The big question is why aren't we seeing more new listings coming on the market? Why aren't people selling their homes as much as they used to? There are several reasons for this. The first reason is what has been called the lock-in effect, that many homeowners got locked into a mortgage rate of around three percent, and the prospect of selling their current home and buying a new home with a six to seven percent mortgage has been an incentive to stay in their current home. We've talked about this one a lot, so we don't need to go into great detail. What to look for in the near future is what happens at the Federal Reserve's next meeting on September 16th and 17th, in which they will make a decision on any change in their Fed funds rate. The Fed is widely expected to cut their rate at that meeting given the major signs of weakness that have shown up in the labor market recently. As of September 13th, the CME FedWatch tool shows a 93.4 percent probability of the Fed cutting by a quarter point, and there's even a 6.6 percent probability that they will go big with a half point rate cut. Given that the high mortgage rates we have now are due in large part to the Federal Reserve's policy of increasing their Fed funds rate in 2022 and 2023, it makes sense to reason that if the Fed lowered their Fed funds rate, that perhaps we could see a decline in mortgage rates that would help unfreeze the housing market. And we've seen this to some extent already, as the expectations for a September rate cut have increased over the last month. The yield on the 10-year Treasury bond was 4.06 percent as of September 12th, the lowest it's been since a brief dip down in April. In response, we've also seen mortgage rates head lower as well. As of September 11th, the average yield on a 30-year fixed rate mortgage was 6.35 percent, the lowest it's been since October of last year. Unfortunately, it's not guaranteed that mortgage rates will come down even if the Fed lowers their Fed funds rate. We've seen this story before. Leading up to the Fed's first rate cut in September 2024, we saw the 10-year Treasury yield and average 30-year fixed rate mortgage head lower in anticipation of that rate cut. But when they finally cut rates, the 10-year Treasury yield and 30-year fixed rate mortgage actually headed higher. The prevailing narrative behind this is that the bond market has been worried about the fiscal health of the federal government and managing its deficits to prevent our ballooning national debt from getting worse. So bond investors want a higher yield on long-term debt to compensate for the risk of holding it. So it's not guaranteed that mortgage rates will keep heading lower even if the Fed does cut rates. We have to remember that the Fed funds rate has more influence on short-term rates and not long-term rates like the 10-year Treasury yield that mortgage rates track closely. There are ways the Fed could impact the long end of the yield curve, but those would be extraordinary measures that no one expects them to do anytime soon. And then that's a whole different video to discuss that. Another potential reason why homeowners have been hesitant to list their homes for sale is that sellers no longer have the same leverage in the current market that they did in the past few years. A lot of this has to do with buyer weakness because of the affordability challenge from high mortgage rates and high home prices. Redfin recently reported that 15% of home purchases fell through in July, the highest rate for a July in data going back to 2017. High home buying costs making buyers skittish was reported as one of the primary reasons for this. In a separate report by the Associated Press, weak home buying demand has left sellers with the choice of either lowering their listing price or just pulling their home off the market if they can afford to wait to sell their home. For homeowners who are thinking about selling their home but see the current weak state of the market, they could be more likely to wait it out if they don't have any life circumstances that would otherwise compel them to list their home for sale. The third potential reason why we're not seeing more new listings is economic uncertainty. The U.S. economy is not in great shape right now. In the first quarter of 2025, U.S. gross domestic product, or GDP, was negative due to a surge in imports to get ahead of tariffs announced in April. And then we had positive growth in second quarter GDP because imports plummeted. Since April, we've also had very weak job growth with non-farm employment averaging just 27,000 new jobs per month from May through August, which for a labor market the size of the U.S. is that's basically zero job growth. Now you might be saying, wait a minute, weren't those job numbers rigged and we can't rely on them? I actually did a video on that topic if you want to dig into it deeper. I don't think the numbers are rigged and based on what we're seeing in more robust jobs data, I think we can safely say there is some weakness in the U.S. labor market right now. In my next video, I'll be doing a deeper dive on the latest economic data, so stay tuned for that. All that being said, there is considerable economic uncertainty right now, which can make a big financial decision like selling a home much more difficult. Add up all these reasons and we have an environment that can lead homeowners to be less likely to list their home for sale than to go ahead with it. And as a consequence, supply is tightening again and keeping prices from falling further at the national level. The best case scenario for the housing market would be for mortgage rates to come down after the Fed cuts their Fed funds rate, which would help buyers on the affordability side of things. Ideally, lower interest rates would help support economic growth as well as bring the labor market back from its current state of virtually no job growth. All this would help more homeowners to be more comfortable putting their home up for sale. Whether it all plays out that way remains to be seen. We'll just have to keep our eye on the data as it comes in. If you liked today's video and want to see more of my content, don't forget to do all that YouTube stuff. Like, subscribe, hit that notification bell down below. And if you have a question about the real estate market or economy that you would like answered in one of my videos, go ahead and put it in the comment section down below. Thanks for stopping by. I'll see you in the next video.