The Real Estate Market in 2025: A Tale of Two Trends

The housing market is experiencing a fascinating contradiction in 2025. While overall home sales have plummeted—with new home sales dropping 13.7% in May alone—there’s a record $700 billion worth of homes sitting on the market. This “frozen” market, characterized by high mortgage rates averaging 6.82% and median home prices of $426,600, has created the first buyer’s market conditions we’ve seen in years. With 9.8 months of housing supply available, buyers finally have choices and negotiating power after years of bidding wars and waived contingencies. Yet amid this market freeze, Generation Z is quietly breaking through in remarkable numbers. Despite coming of age during the pandemic’s economic upheaval, Gen Z now accounts for one in four loans issued to first-time homebuyers—actually outpacing Millennials and Gen X at the same age. Their secret? Geographic flexibility, financial discipline, and realistic expectations. From Samantha Garcia moving from LA to affordable Redding, California, to Dominic Azpeitia relocating from Southern California to Phoenix, young buyers are willing to go where their dollars stretch further. The shift toward remote work has been a game-changer for these young buyers, allowing them to escape expensive coastal markets for more affordable inland areas. Many are also benefiting from the current buyer’s market conditions, with sellers increasingly offering concessions, covering closing costs, and making repairs—opportunities that simply didn’t exist during the pandemic’s seller’s market frenzy. For anyone considering a move in 2025, the message is clear: this market rewards preparation, flexibility, and patience. Whether you’re a buyer taking advantage of increased inventory and seller concessions, or a seller adjusting to longer marketing times and competitive pricing, success in today’s market comes from adapting to the new reality rather than waiting for conditions to return to “normal.”