Housing Market Insights: What You Need to Know About Inventory, Inflation, and Interest Rates
In this latest update, Windermere’s Chief Economist, Jeff Tucker, breaks down the key economic numbers to keep you in the loop about the real estate market.
The data emerging from the housing market so far this year paints a picture of a spring home-buying season that’s a bit more buyer-friendly than in previous years. Here’s a key number to know:
28%
That’s how much more active listings there were in February 2025 compared to February 2024. The year-over-year chart shows a noticeable slow down in late 2024, but the trend is picking up again in early 2025. This surge is primarily due to buyers easing up on the accelerator, as higher mortgage rates in the new year have caused some caution.
Let’s break down how this inventory trend compares to recent years:
We’re now just 9% below the levels we saw in February 2020, before the pandemic sparked a multi-year supply shortage. For buyers hitting the market this spring, they’ll find the most options available in five years. This should help moderate home price growth this spring and encourage sellers to be more conservative with their asking prices.
Next up:
1%
Pending sales are up by only 1% compared to the same time last year, confirming that the late 2024 spike in buyer demand has passed. For those shopping now, that means less competition from other buyers.
Another important number:
2.8%
This is the inflation rate for February, based on the year-over-year change in the Consumer Price Index. It’s a welcome dip from the 3.0% rate in January, with the monthly gains cooling off to 2.6%. While this is a positive sign, there’s growing uncertainty about whether the decline in goods prices will continue, especially as tariffs start to take effect. This is one reason why the Federal Reserve is holding steady on rate cuts for now.
Finally, let’s talk interest rates:
6.75%
That’s where 30-year mortgage rates stood as of mid-March, about a quarter-point lower than their peak earlier this year. Coupled with more inventory, this combination makes for favorable purchasing conditions as we dive into the spring homebuying season.
With more choices on the market and a cooling inflation rate, buyers may find better conditions to make their move this spring. Keep these numbers in mind as you navigate the housing market!