A Mid-Year Look at Housing Trends, Economic Signals, and Legislative Updates
As your trusted partner in home financing, we’re excited to bring you this July 2025 housing market update—a high-level overview of the current housing landscape, key economic indicators, and legislative changes affecting buyers, sellers, and industry professionals.
Our goal is to provide insights that empower homeowners, first-time buyers, real estate agents, insurance professionals, attorneys, and all members of our community to make well-informed decisions. With signs of stabilization and potential growth ahead, there’s reason for optimism as we move through the second half of 2025.
📈 July 2025 Housing Market Update: Trends and Buyer Activity
Resilience in Sales and Buyer Confidence
The U.S. housing market continues to show strength in mid-2025, with modest sales growth and a gradual easing of challenges that buyers have faced in recent years.
According to the National Association of Realtors (NAR), existing-home sales increased 0.8% month-over-month in May, reaching a seasonally adjusted annual rate of 4.03 million. While sales are down slightly by 0.7% year-over-year, the monthly uptick reflects improving buyer confidence—despite ongoing inventory constraints.
Home Prices and Housing Forecasts
- Zillow reports the average U.S. home value at $369,147, up 0.5% year-over-year.
- Redfin noted a 0.6% increase in May median prices, with several markets reaching record highs.
- Zillow forecasts a potential 1.4% decline in home values over the remainder of 2025, which may improve affordability for first-time buyers and move-up shoppers.
Pending Sales and Competitive Dynamics
Pending sales fell 3.5% year-over-year (Redfin), suggesting the market may be cooling slightly. This may reduce buyer competition and lead to more negotiable conditions and pricing opportunities—a key point in this July 2025 housing market update.
International and Generational Buyer Trends
Foreign investment in U.S. homes surged to $56 billion from April 2024 to March 2025—a 33% increase year-over-year (NAR), showing continued international interest in U.S. real estate.
Meanwhile, Gen Z buyers (ages 18–25) accounted for just 3% of home purchases, highlighting affordability challenges but pointing to long-term growth potential as market conditions evolve.
Mortgage Rate Trends and Market Outlook
Mortgage rates are stabilizing. According to Freddie Mac, 30-year fixed rates averaged 6.7% in early July 2025. As rates settle, refinance and purchase activity may increase—creating momentum for both current homeowners and buyers entering the market.
🏛️ July 2025 Housing Policy Updates: Legislative Changes Impacting Homeownership
Expanded Tax Relief for Homeowners
Recent federal legislation includes the restoration of mortgage insurance deductions and expanded SALT (state and local tax) deductions. These changes provide tax relief for homeowners—especially those with lower down payments or who live in higher-tax states.
In addition, permanent extensions of Qualified Business Income deductions and Opportunity Zones benefit professionals and investors with long-term tax planning options.
Federal Efforts to Expand Housing Supply
Incentives for new home construction are gaining traction, aiming to ease inventory shortages and improve price stability.
Expanded low-income housing tax credits could generate over one million affordable rental units in the next decade—helping address supply gaps in underserved communities.
Property Investment and Estate Planning
The reinstatement of full expensing for improvements and equipment is motivating both residential and commercial development.
Estate tax thresholds have also increased, supporting multigenerational planning and property preservation strategies.
Strengthening Fair Lending and Access
Provisions to enhance fair lending practices aim to expand equitable access to homeownership while reducing structural barriers.
New policies are in place to enhance fair lending practices and promote equitable access to homeownership.
For attorneys, real estate agents, and financial advisors, this July 2025 housing market update highlights an important opportunity to advise clients on tax-advantaged strategies and compliance shifts.
💡 What These Housing Insights Mean for You
The landscape is shifting in favor of increased opportunity—whether you’re:
A first-time buyer watching rate trends,
A homeowner considering a refinance or sale, or
A real estate partner or advisor helping others navigate their next step.
This July 2025 housing market update reflects a promising landscape, with steady rate improvements, increasing affordability incentives, and favorable conditions for long-term growth.
Stay Ahead with Personalized Financing Guidance
At NewFed Mortgage, we’re tracking these market trends and policy updates closely. Whether you’re buying, refinancing, or advising others—we’re here to help you make confident, informed decisions.
👉 Connect with us today for a personalized financing strategy tailored to your goals.
