May 2025 Housing Market: Inventory Continues to Climb as Buyer Activity Remains Robust

The U.S. housing market is continuing its shift toward a more balanced environment, with rising inventory and steady contract activity shaping February 2025’s trends. While new listings remain constrained, overall inventory levels have expanded significantly, providing buyers with more choices and softening competitive pressures.

Inventory Growth Approaching Buyer-Friendly Conditions

The supply of homes on the market continued its substantial growth in May 2025. Total inventory surged by a remarkable 22.9% compared to May 2024, and is up 43.0% from 2023. This expansion has pushed inventory to its highest level since 2021, a welcome sign for buyers. Months of inventory now stands at 5.0 months, signaling a neutral market that is increasingly bordering on buyer-friendly territory.

While net new listings for May 2025 saw a modest 0.8% year-over-year increase, this was primarily driven by a 5.3% rise in new listings entering the market, even as removals also increased by 29.2% compared to May 2024. This dynamic suggests properties are still coming onto the market, but also a healthy churn of homes being taken off.

Despite the relatively flat growth in net new listings for the month, contract volume showed strong year-over-year momentum. In May 2025, 317,362 properties went under contract, marking a healthy 5.8% increase compared to May 2024. This consistent activity underscores the underlying resilience of buyer demand.

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Price Growth Continues, Accompanied by More Price Cuts

The median listing price for single-family homes in the U.S. reached $470,560 in May 2025, representing a 2.3% increase year-over-year. The median closed price also rose, climbing 1.9% year-over-year to $439,149. Price-per-square-foot metrics also followed this upward trend, with listed and closed median price-per-sqft both showing year-over-year gains.

However, sellers are increasingly adapting to the evolving market conditions. Price cuts continued to be a significant factor, increasing by 34.7% compared to May 2024. While the median sale-to-list price ratio remains solid at 98.7%, the rise in price reductions suggests sellers are becoming more proactive in adjusting their pricing to attract buyers in a market with more options.

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Rental Market Sees Significant Inventory Expansion

The single-family rental market continued its trend of expanding supply. Rental inventory was up 22.7% year-over-year and an even more substantial 40.5% compared to 2023. This notable increase in available rental properties appears to be having an impact on pricing, as the median listed monthly rent saw a slight year-over-year decrease of 1.4% to $2,593.

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Price Tier Dynamics: Varied Listing and Contract Activity

An examination of contract and net new listing volume across different price segments reveals diverse patterns:

• $0-$200k: Net new listings down 7.1% YoY; contract volume up 9.4%.
• $200k-$400k: Net new listings down 5.0% YoY; contract volume up 7.7%.
• $400k-$600k: Net new listings up 1.4% YoY; contract volume up 4.9%.
• $600k-$1m: Net new listings up 9.4% YoY; contract volume up 3.7%.
• $1m+: Net new listings up 11.8% YoY; contract volume up 0.5%.

This tiered analysis indicates that while net new listings decreased in lower price points, contract volume remained strong in these affordable segments. Conversely, higher price tiers saw continued growth in both net new listings and contract volume, reflecting ongoing activity across the spectrum.

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What This Means for the 2025 Housing Market

May's data reinforces the narrative of a housing market transitioning towards a more balanced state. The sustained growth in inventory provides welcome relief for buyers, offering more choices and potentially easing some of the competitive pressures seen in recent years. Simultaneously, consistent contract volume demonstrates that fundamental buyer demand remains healthy. While home prices continue to appreciate on a year-over-year basis, the increasing prevalence of price cuts signifies a market where sellers are actively adapting their strategies to meet current conditions.

As the housing market continues its evolution through 2025, access to precise, data-driven insights remains invaluable. HouseCanary is dedicated to empowering real estate professionals and investors with the intelligence needed to confidently navigate these shifting dynamics and make informed decisions.

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More in the full report.

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‍Methodology

The Market Pulse Report is an ongoing review of proprietary data and housing market trends from HouseCanary’s nationwide platform, covering 22 listing-derived metrics and comparing real estate data between May 2024 and May 2025.