The 2025 Market Is Shifting—Here’s What That Means for You
Since March 2020, the housing market has stopped making sense—at least compared to the two decades before it. We got hit with the perfect storm: a global pandemic, sudden work-from-home flexibility, and the realization that your “home” needed to support your entire lifestyle—because for a while, you weren’t leaving it.
Then came historically low interest rates. Mortgage payments were slashed, and with two-thirds of all home purchases relying on financing, that alone poured gasoline on buyer demand.
But just as buyers flooded in, sellers hit pause. Listings dried up. Inventory vanished. And what would’ve been a tight market in normal times turned into a full-blown supply crisis at the peak of demand. Home values surged across the country, and nearly every market saw record-breaking prices.
Then the Fed intervened. Interest rates doubled in under six months, flipping everything again. The result? Two straight years—2023 and 2024—of the lowest home sales since the 1990s.
Which brings us to Spring 2025: the new normal. A weird, wobbly market where buyers and sellers are trying to figure out what’s real and what’s just noise.
What’s Actually Happening Nationally?
Here’s a quick snapshot of where we’re at:
Discounts Are Back: In January, the typical U.S. home sold for 1.8% below asking—the largest discount in nearly two years.
Homes Are Sitting Longer: Average time on market reached 56 days, the slowest pace in almost five years.
Inventory Is Up: April saw a 30.6% year-over-year increase in active listings.
Price Cuts Are Climbing: Nearly 1 in 5 homes reduced their price in April—the highest April share since at least 2016.
Even markets like Florida—once at the center of the post-pandemic frenzy—are seeing sellers take discounts and inventory surge. The cost of ownership has climbed sharply there, with higher insurance premiums, HOA fees, property taxes, and increasing storm-related risks. It’s a reminder that even strong demand can’t always outrun affordability.
Translation? The housing market isn’t collapsing, but it’s also not accelerating. The days of prices rising simply because there was nothing available are over—for now.
Local Lens: Western Wisconsin
We’re seeing a lot of the same signs here in western Wisconsin, and in some cases, they’re showing up even more clearly.
Homes Are Sitting Longer: As of May 2025, the median cumulative days on market (CDOM) is 70 days, according to data from the Realtors of Northwestern Wisconsin MLS. That’s the highest it’s been in over five years. Buyer urgency has cooled—but it’s worth noting that lower-priced homes are still seeing competition and occasional multiple-offer scenarios.
Sales Volume Is Holding Steady: Between January and May 2025, 2,185 homes sold, up slightly from 2,141during the same time last year. The pace is slower than it was at the peak, but demand hasn’t disappeared.
Prices Are Leveling Off: The median sale price in May 2025 was $310,000, down from $320,000 last May—a 3.1% decrease. Month-to-month numbers always vary, but we’re seeing a more balanced market overall. Home values are holding relatively steady, without the aggressive appreciation we saw in 2021 and 2022.
So What Does It All Mean?
Whether you’re buying or selling, the message is the same: this is a normalizing market. Homes aren’t flying off the shelf. Pricing matters again. And negotiation is back.
My Take
Sellers: This isn’t the time to test the market with an aspirational price. If you receive an offer 2% below asking, it’s not a loss—you’re still in a strong position. Think of it like holding a stock you bought at $100, watched hit $1,000, and are now selling for $900. You didn’t miss out—you still did extremely well.
Buyers: Yes, rates are higher than a few years ago. But today’s market is far less competitive—and that gives you room to breathe. Find the right home. Make a smart offer. Buy the asset now, and fix the financing later if rates come down.
If you're thinking about making a move, I’m always here to talk specifics and help you navigate what this market means for your goals.
