Amid growing economic uncertainty surrounding the Trump administration's tariffs, some real estate analysts now think U.S. home prices will fall by the end of the year instead of rising as previously thought.
A new report by Redfin estimates that the median sale price of a typical U.S. home will fall flat in the third quarter of the year, while it will slide down by 1 percent in the fourth quarter.
Since the beginning of the year, analysts started observing that the housing market seemed to be approaching a breaking point, with buyers being pushed to the sidelines by high prices and elevated mortgage rates while sellers finally decided to put their homes on the market.
Now, they think that the current economic climate might actually finally bring prices down—a welcome change for aspiring homebuyers.
The annual price decrease they now expect to report in the last quarter of 2025 would be, in a way, a seismic change for the housing market.
The reason for the 1 percent drop forecasted by Redfin is simple, researchers at the real estate brokerage said: There are now more sellers than buyers in the market. After years of chronic shortages, the supply of homes on the market is finally on the rise, with the total inventory rising 16.7 percent year-over-year in April to its highest level in five years. New listings were up 8.6 percent.
While there is still a sizable gap between supply and demand in the country, many aspiring homebuyers just cannot afford to purchase a property right now. As a result, demand is down, with sales of existing homes down by 1.1 percent year-over-year in April to a six-month low, according to Redfin.
