The housing market in the third quarter of 2025 presents a complex landscape, as reported by Bankrate. While home affordability remains a significant challenge, with prices continuing their upward trajectory, a notable increase in housing inventory is providing buyers with some much-needed leverage.

According to the National Association of Realtors, the median home price in May reached a record high of $422,800, marking the 23rd consecutive month of year-over-year price increases. This price surge has put homeownership out of reach for many prospective buyers. Meanwhile, mortgage rates are hovering just below 7 percent, and experts do not foresee a substantial drop in these rates any time soon.

Despite these challenges, the rise in housing inventory is a glimmer of hope for buyers. As ATTOM data suggests, the amount of available homes for sale is on the rise, and experts predict that pre-pandemic inventory levels could be surpassed by the end of 2025. This increase in inventory may offer more choices to homebuyers, enhancing their negotiating power and potentially boosting homebuying and sales activity later in the quarter.

Rob Barber, CEO of data firm ATTOM, notes that “this third quarter might not follow the usual summer surge we typically see.” With mortgage rates still high and home prices remaining elevated, the buying season is expected to be more subdued. However, should rates dip or inventory improve, some demand may resurface.

Greg McBride, Bankrate’s chief financial analyst, echoes this sentiment, stating that “home sales remain at some of the lowest levels in 30 years.” While this year’s sales tally may appear weak compared to historical norms, it is expected to be better than last year.

The Mortgage Bankers Association forecasts that 30-year loan rates will average 6.8 percent in Q3, while Fannie Mae predicts a slightly more optimistic average of 6.3 percent.

In conclusion, while the housing market in Q3 2025 faces challenges with high prices and mortgage rates, the increase in housing inventory is a positive development for buyers. As always, prospective homebuyers and sellers should remain informed and prepared to navigate these evolving market conditions.

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