Welcome to the August 2025 Monthly Real Estate Market Report! This month’s housing update tells a story of two very different real estate markets unfolding across the country. While some regions are still moving quickly with strong buyer demand, others are seeing slowing sales, longer time on market, and more price reductions.

In this report, we’ll cover:

1. How market conditions vary dramatically by region.
   
   

2. The state of inventory and its impact on prices.
   
   

3. The latest trends in mortgage rates — and what they mean for affordability in the months ahead.

1. A Tale of Two Markets

Just a few years ago, the national real estate scene was largely uniform: rapid sales, surging prices, and tight inventory everywhere. Today, the picture is far more varied.

Shifting Power Dynamics

Since the peak of the pandemic housing boom in 2022, the balance of power has been gradually shifting from sellers toward buyers — but not evenly.

Regional Differences:

• Northeast – More buyers than sellers, with homes still selling quickly due to low inventory.
  
  

• Midwest – Fairly balanced market, leaning slightly toward buyers.
  
  

• South & West – Higher inventory and more sellers than buyers, creating slower sales and more price cuts.
  
  

According to Realtor.com, the South and West have seen the greatest inventory gains and sharpest slowdowns, while the Northeast and Midwest remain relatively tighter but are still trending toward more buyer-friendly conditions.

2. Inventory Trends and Price Impact

Inventory is the main factor driving today’s market differences.

Key Trends:

• Nationally, inventory remains 13% below pre-pandemic levels (2017–2019 averages, which are the last historically stable figures).
  
  

• States like Texas (+32%) and Florida (+29%) are well above pre-pandemic inventory, creating downward pressure on prices.
  
  

• In Tallahassee, we are trending slightly lower than pre-pandemic inventory levels, which is beginning to stabilize prices.

Metro-Level Insights:

• 13 of the top 50 metros now exceed pre-pandemic inventory by 25% or more — all in the South or West.
  
  

• 17 of the top 50 metros are still at least 25% below their pre-pandemic norms.
  
  

This divergence is why home prices are holding firm in some areas but softening slightly in others. Nationally, prices rose an average of 55% over the past five years, so small declines of 3–4% in some markets are not indicative of a crash.

3. Mortgage Rates: Stability and the Road Ahead

Mortgage rates have been surprisingly stable this year, hovering between 6.5% and 7% for a 30-year fixed loan. While higher than buyers and sellers would like, this stability provides predictability.

Market Sentiment:

• Analysts call this the “most calm period for mortgage rates in recent history.”
  
  

• Stability has allowed inventory to improve and home price growth to slow.
  
  

• Even small rate drops — a quarter or half a percent — can mean meaningful monthly payment savings for buyers.
  
  

Forecast:

• Most experts expect rates to trend slowly downward over the next 12–18 months, with a chance of seeing a rate below 6%.
  
  

• A gradual decline is more likely than a sharp drop, but even incremental changes could bring more buyers off the sidelines.
  
  

4. Affordability Outlook

Affordability remains the biggest challenge in today’s housing market, driven by the combination of:

1. Elevated home prices.
   
   

2. Higher mortgage rates.
   
   

3. Income growth lagging behind housing costs.
   
   

However, there is cautious optimism ahead:

• Wages are rising.
  
  

• Price growth has slowed compared to recent years.
  
  

• Mortgage rates are expected to ease modestly.
  
  

Together, these factors could improve affordability over time — though not overnight.

5. The Role of Education in Today’s Market

In this complex environment, market knowledge is power. Many buyers and sellers are not fully aware of current trends, especially when moving between regions with very different conditions.

Real estate agents and local lenders can bring tremendous value by:

• Explaining local vs. national market dynamics.
  
  

• Breaking down how inventory and rates impact affordability.
  
  

• Helping clients navigate opportunities despite challenges.
  
  

Even simple explanations — such as how a 0.25% drop in rates can save $66 per month on a $400,000 loan — can help buyers make confident decisions.

Final Thoughts

The August 2025 real estate market is not universally hot or cold — it’s a nuanced blend of both. Some regions favor sellers, others buyers, and mortgage rates remain a key factor influencing demand.

Whether prices in your area are holding firm or softening slightly, remember:

• Life events continue to drive home purchases.

• Opportunities exist in every market for informed sellers and buyers.

• Your role as a market educator has never been more important.
  
  

Tallahassee Real Estate Market Statistics