The US housing industry is showing signs of a pivotal shift as of November 2025. Recent Federal Reserve policy changes, with two quarter-point interest rate cuts in September and October, have contributed to a more optimistic market outlook. However, mortgage rates remain stubbornly high, averaging 6.2 percent for 30-year fixed loans as of November 11, only modestly lower than recent highs and well above pre-pandemic levels.
Housing inventory has increased for 22 consecutive months, providing buyers with more choices and bargaining power, especially in regions where supply surpasses six months’ worth of listings. Prices have become stagnant on the national level, and price cuts are accelerating. Regional divergence is notable. Cities like Austin, Texas, are emblematic of the new cycle, with prices dropping 15 percent since 2022 and new construction making up about a quarter of homes for sale. Southern and Western markets, particularly former pandemic-driven hotspots, lead in price declines. Meanwhile, ICE Home Price Index data suggests home prices “firmed” and grew by 0.9 percent year over year in October, showing that price drops are not universal.
Despite increased supply and cooling prices, affordability remains a severe challenge. Eighty-four percent of Gen Z report delaying major life milestones, including homeownership, due to high costs. Broader consumer behavior reflects hesitancy, with many potential buyers waiting for lower rates and more competitive pricing. This has discouraged both buyers and sellers amid persistent economic uncertainty and slower wage growth.
No major new product launches or industry partnerships have disrupted the market in the past week, but industry leaders like Berkshire Hathaway HomeServices describe the situation as a potential turning point for buyers. The focus is on restoring market confidence and encouraging transactions through further rate reductions and possible policy support.
Compared to earlier in the year, the market’s balance is improving, but the road to full recovery relies on sustained affordability gains, continued increases in inventory, and psychological shifts among cautious consumers. The coming months will test whether current conditions mark the start of a lasting recovery or simply a pause on the way to further correction.
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