Real Estate Market Trends 2025 July

The real estate market is adjusting quickly in response to several converging trends. In the U.S., mortgage rates have eased slightly (hovering around 6.6–6.8%), which, combined with homeowners finally listing properties after holding onto low pandemic-era locks, has led to a noticeable increase in inventory—up over 16% year-over-year. As a result, sellers in many markets are being forced to reduce prices: in May 2025, 1 in 5 listings were cut—the highest rate in nearly a decade—allowing buyers to gain more negotiation power and take longer to make decisions marketwatch.com. Economists are keeping an eye on warning signs like falling prices, sluggish new construction, and weaker residential hiring, which could foreshadow a broader economic slowdown businessinsider.com. On the luxury end, cash-rich buyers are propping up high-end urban markets—like Manhattan, where 69% of transactions were cash deals in Q2—while broader markets remain cautious nypost.com. Meanwhile, in Canada, the Greater Toronto Area is seeing modest recovery in sales despite slightly falling prices, buoyed by lower borrowing costs usnews.com+15reuters.com+15har.com+15. Globally, auction platforms are gaining traction in European luxury markets, and in California, upcoming legislative changes are expected to unlock new housing supply—but full impact likely won’t materialize until 2028–29 barrons.com. Overall, the market is shifting toward a buyer’s advantage with softer conditions, yet remains uneven—strong at the top end of luxury and in regions with catalysts like policy reform—while broader affordability and economic headwinds weigh on momentum.

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