COLUMBUS, Wis., July 24, 2025 (GLOBE NEWSWIRE) — In a market update released today, Michael Eisenga, CEO of First American Properties LLC, addressed significant trends emerging in the U.S. housing sector for the month of June. Citing a confluence of weakening price trends, rising inventory, and a pullback in single-family home construction, Eisenga emphasized that the second half of 2025 may mark a structural shift in market dynamics—offering buyers more leverage than at any point in the past two years.
“The June data reveal a market under pressure from multiple directions. Aggregate home prices for M3 cities declined by -0.77% from May to June—a move without historical precedent in the National Association of Realtors (NAR) series going back to 1999,” said Eisenga. “This rare mid-year decline suggests a recalibration in price expectations, even as broader fundamentals remain constrained by affordability challenges and supply imbalances.”
Using Redfin data, Eisenga noted that home sales in M3 cities were up 5.72% year-over-year, a modest sign of demand resilience, even as month-over-month sales declined by 2.20%. The median home price rose 0.82% YoY, but also declined 0.77% MoM, further reinforcing the trend of price moderation in the face of increasing inventory and buyer hesitation.
In the mortgage space, headline delinquency rates for FHA loans in the GNMA II portfolio—representing approximately 6.9 to 8 million FHA loans—jumped from 9.96% in May to 10.67% in June, according to an analysis by John Comiskey. Serious delinquencies ticked upward as well, from 3.21% to 3.32%, raising early warning signals for potential stress in lower-income segments.
New Construction: Inventory Surges, Builders Pivot. Data from the Census Bureau showed June new-home sales rose modestly by 0.6% to a seasonally adjusted annual rate of 627,000 units, though still 6.6% below year-ago levels and short of expectations (650K). Most notably, new-home inventory surged to 511,000 units, the highest since October 2007, translating to a 9.8-month supply.
“A nearly 10-month supply is a flashing red light for homebuilders,” Eisenga said. “It’s putting real pressure on prices and forcing aggressive discounting.”
The median new-home price declined 2.9% YoY to $401,800, as builders offered the most widespread discounts since 2022. According to NAHB data, 38% of builders cut prices (by an average of 5%), and 62% offered incentives, including rate buydowns and closing cost assistance.
Although total housing starts rose 4.6% to 1.32 million units, the increase was driven primarily by multifamily projects. Meanwhile, single-family housing starts fell to an 11-month low, and building permits declined to their lowest level in over two years. These trends underscore a broader pullback in traditional residential development, largely due to elevated mortgage rates (~7%) and high construction costs.
Existing Home Market: Inventory Rising, Sentiment is Depressed. In the resale market, existing-home inventory surged nearly 29% YoY, reaching post-pandemic highs, though still about 13% below pre-COVID norms. Homes are sitting on the market longer, with the median listing duration rising to approximately 53 days. Price growth has essentially stalled, up just 0.2% YoY, pointing to a slowly normalizing market environment.
Yet, consumer sentiment remains tepid. Only 28% of surveyed buyers believe now is a good time to buy, despite greater selection and softening prices.
Eisenga concluded with a candid outlook:
- Supply Glut Developing in New Homes: Especially in the entry-level segment, where sales are soft and incentives are peaking.
- Builders Becoming More Aggressive: Discounts and incentives are now the norm, not the exception.
- Single-Family Construction is Slowing Sharply: High rates and rising costs are choking new development.
- Buyer Leverage is Improving: But affordability remains a major headwind due to high borrowing costs and stubbornly elevated price levels.
“We’re entering a period of recalibration. While the fundamentals for long-term housing demand remain intact, the short-term dynamics are clearly shifting in favor of buyers—particularly those with the flexibility and financial strength to act decisively,” said Eisenga.
Contact:
First American Properties LLC
1-920-350-5754
meisenga@firstamericanusa.com
