Active listings reach huge milestone

Huge milestone

Our first story today is a big one. The number of active listings on the U.S. home market has crossed the one million mark for the first time in nearly six years. 

This is clearly an important milestone, but as we explain below, it doesn’t tell the whole story.

While all 50 of the largest metros have seen inventory gains, only 22 of them are back to 2017-2019 levels, and all of them are in the South or West.

This is a good opportunity for us to remind you that while it is certainly important to stay up to date on the national headlines, keep in mind that they’re usually just half the picture. Always stay equally up to speed on what’s happening in your local market.

With that, let’s get into today’s edition of The Blueprint!

- James and David

There are over 1M active listings in the U.S. now

For the first time since winter 2019, U.S. housing inventory has crossed the one million mark. Active listings jumped to 1,036,101 homes in May, up 31.5% year-over-year and 8% from April, according to Realtor.com’s May 2025 Monthly Housing Trends Report,. Here’s more key data from the report:

• Total unsold homes, including those under contract, are up 20.8% YoY

• The median listing price is $440,000, up 2.0% MoM and 0.1% YoY

• The median days on market are 51 days, 6 days longer than last year

• 19.1% of listings saw price cuts, the highest May share since at least 2016

• The median list price per square foot is $234, up 0.5% MoM and 0.6% YoY

• Only 22 of the largest metros have returned to 2017–2019 levels, and all of them are in the South or West.

• Here are the top five markets leading the inventory comeback: 

  • Denver, CO: 100.0%

  • Austin, TX: 69.0%

  • Seattle, WA: 60.9%

  • San Antonio, TX: 58.3%

  • Dallas, TX: 55.5%

Our take

While crossing the 1 million active listings mark is a big headline, it doesn’t tell the whole story. Some metros are flush with supply and price cuts, while others are still starved for listings. Agents must know inventory levels in their own market. In high-inventory markets, sellers need a pricing and concession strategy; in low-inventory markets, buyers still need to move fast and compete. If you want a first-hand account of this reality, read what Zillow economist Orphe Divounguy had to go through to get his home in Raleigh (remember: looking at housing data is his life!). We can’t say it enough: Local expertise isn’t optional, it’s essential. Look at the specific district, the geographic distribution, and the price point. It all matters.

Luxury home values rise despite slowdown

The typical luxury home – defined as the top 5% of homes by value in each region – is now worth about $1.8 million nationwide, according to Zillow’s latest report. Luxury home values rose 2.7% year-over-year, nearly double the 1.4% growth seen across the broader market.

But while contracts surged by more than 30% from February to March, contracts fell in April by 12%. Also, new luxury listings dipped 5% month-over-month and 3.4% year-over-year.

Here’s where luxury home values have surged the most year-over-year:

• Cincinnati (7.3%)

• Columbus (6.8%)

• Chicago (6.3%)

• Cleveland (6.1%) 

• Las Vegas (6.1%) 

Here are the only major markets where luxury home values have dropped: 

• Austin (-2.1%)

• Tampa (-1.7%)

• Miami (-0.5%)

Our take

It’s too early to say whether April’s dip is a blip or the start of a broader slowdown. Luxury prices are holding firm, but demand is showing signs of hesitation, likely a reflection of growing economic uncertainty. Even with tight inventory, high-end buyers may be becoming more value-conscious, especially as the gap between luxury and mid-market homes narrows. In this environment, precise pricing and sharp negotiation matter more than ever. We’ll be watching closely to see where the trend goes from here.

States with the highest and fastest-growing construction wages

Nationally, average hourly earnings (AHE) in construction rose 3.6% year-over-year in April, reaching $39.30 per hour, according to the latest data from the Bureau of Labor Statistics. But the picture varies dramatically by state. AHE growth ranged from a 10.6% increase in Nevada to a 3% decline in Oklahoma. Fourteen states now report average earnings over $40/hour, while nine states, mostly in the South, remain below $34/hour.

Here are the top 5 states with the highest average hourly earnings and those that saw the biggest growth in earnings as well:

Our take

This matters a lot for agents. In fast-growing states, rising labor costs could impact build timelines, squeeze developer margins, and push up home prices. These wage pressures may lead builders to limit incentives or scale back speculative builds. So far, that hasn’t happened. But stay in close contact with your builder partners and prepare your buyers for potential delays or price adjustments. Labor costs may not grab headlines, but they absolutely shape the market.

Schematics

The news that just missed the cut

• David explains how to bounce back from losing a big deal

• Million-dollar home sales are booming in the Hamptons

• This is why knowing your local market is so invaluable. There is no substitute.

• NAR officially rescinds the no-commingling rule

• International demand for U.S. homes grew in Q1

Foundation Plans

Advice from James and David to win the day

Right now, buyers have a lot of leverage in the market. This is why we’ve launched a series on financing and negotiation strategies. You can read Part One here. In Part Two, we gave tips on how to structure smarter offers without increasing the offer price. In today’s edition, we explain how buyer agents can help their clients get financing assistance from sellers. 

Use seller credit for rate buydowns – Instead of negotiating down the asking price of a home, negotiate to have the seller buy down the buyer’s mortgage rate. The cost to the seller is the same and negligible, but the savings to the buyer are substantial. 

Seller Financing – Just as it sounds, this strategy involves the seller giving a home loan to the buyer of the property, who then pays the seller back with interest. The buyer benefits with a lower interest rate than what a bank would offer, while the seller benefits by being paid back at an interest rate that’s likely higher than what a savings account or CD would yield.

It can be used for properties with or without an existing mortgage. Also, it establishes a new payment schedule based on negotiated terms such as a down payment, purchase price, and interest rate.

Main benefits: 

• Negotiation Flexibility: All terms are open for negotiation, enabling buyers to customize the agreement to suit their financial requirements.

• Simplified Process: Since there are no banks involved, the transaction can proceed more smoothly and inexpensively without lending fees.

• Potential for Improved Terms: Buyers and sellers can negotiate all payment aspects, not just the purchase price, potentially leading to better and more adaptable loan conditions.

Subject-to-Financing: This is a method where the buyer assumes the seller's existing mortgage payments. The seller's original mortgage remains in place, with the buyer taking over the payments without the loan being formally transferred. It results in the property's deed being transferred to the buyer while the existing mortgage remains in the seller's name. Consequently, the buyer owns the property but makes payments on the original mortgage.

Main benefits:

• Lower Entry Cost: This typically demands less initial cash compared to conventional financing methods.

• Favorable Interest Rates: Buyers can profit from assuming an existing mortgage with a lower interest rate than what is presently available in the market. 

• Maturity Advantage: By taking over a mortgage that began even a year before the purchase, buyers can leverage a more advanced amortization schedule, effectively bypassing a substantial amount of interest.

When using these financing methods, you will sometimes have to educate the sellers, and occasionally, the agents involved. However, the extra step is worth it, especially in tough market conditions or when struggling to sell or buy properties through traditional means. Every situation is different, so different strategies will apply. For a real-world example, read how agent Mel Dorman used seller financing to purchase a triplex with only $500 down.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

We can’t emphasize enough Buffett’s message: Don’t let events and people set your agenda in life. Stay ruthlessly focused on your goals. Have a great weekend, friends!  We’ll see you back here on Tuesday!

- James and David