For the first time this decade, the U.S. housing market is tilting in favor of buyers. In January 2025, the supply of homes for sale reached 3.7 months, the highest level since February 2019. This is a notable increase from 3.3 months just a year ago and signals a shift in market dynamics that both buyers and sellers should pay close attention to.

Why Is This Happening?

Several factors contribute to this increase in housing inventory:

1. Higher Mortgage Rates – Elevated interest rates have discouraged some buyers from entering the market, leading to longer listing times for sellers.
2. Slower Price Growth – Home price appreciation has moderated, giving buyers more negotiating power.
3. Economic Uncertainty – Inflation concerns and economic shifts have led some potential buyers to delay purchasing decisions, further increasing inventory levels.
4. More New Construction – Builders have ramped up housing production, adding more options to the market and reducing competition for existing homes.

Additional Data Supporting a Buyer-Friendly Market

There are a range of other data points signaling favorability for buyers ahead of the spring homebuying season:

• Sales are slow: Pending sales fell 6.3% in January to the lowest mark since the early days of the pandemic in April 2020.
• Listings are sitting longer: The typical home sold in January had been on the market for nearly two months (56 days), the longest period since February 2020.
• Price growth is slowing: The median U.S. home price was up 4.1% year over year in January, the slowest growth since September and more in line with the rate experienced in the late 2010s.
• More negotiation is possible: The typical home sold for 1.8% less than its final asking price in January, the biggest discount in nearly two years.
• Deals are falling through: Home purchases were canceled at the highest January rate since at least 2017 last month.

What This Means for Buyers

If you’ve been waiting for the right time to buy, this shift could work in your favor. More homes on the market mean less bidding war competition and greater negotiating power. Sellers may also be more willing to offer incentives such as covering closing costs or making repairs to close deals faster.

What This Means for Sellers

Sellers will need to adjust their strategies to compete in a buyer-friendly market. Pricing homes competitively, improving curb appeal, and offering incentives will be key tactics. While the market isn’t crashing, the days of rapid over-asking-price sales may be slowing down.

How Fidelis Mortgage Corporation Can Help

Whether you’re a buyer looking to take advantage of increased inventory or a seller navigating this changing landscape, Fidelis Mortgage Corporation is here to guide you. We offer expert advice on mortgage rates, financing options, and market strategies to help you make the best decision in this evolving market.

Ready to explore your options? Contact us today to see how we can assist you in making your next move in real estate a successful one!