Real Estate Market Update: August 2025

It’s been a slow summer. Will things pick up this fall? Only time will tell.

 According to a Redfin report, the typical home that went under contract in July sat on the market for 43 days, the longest July span since 2015. The good news? Mortgage rates have fallen, and homeowners are still sitting on a substantial amount of equity.

 Want the latest housing market news? Here’s your August 2025 real estate market update.

August Housing Market Trends

Homebuyers may have the upper hand, but homeowners will still come out on top financially.

Existing Homes

According to the National Association of Realtors (NAR), existing home sales increased by 2% in July. The median home price was $422,400, a 0.2% increase from the previous year.

 NAR noted that it’s a very slight improvement in housing affordability, but it’s helped push up sales. Wage growth is also outpacing home price growth, and buyers have more choices.

 "Near-zero growth in home prices suggests that roughly half the country is experiencing price reductions. Overall, homeowners are doing well financially,” said NAR chief economist Lawrence Yun.

 This is great news for buyers! Although there have been some price reductions, homeowners are still doing well in this market, thanks to the 49% home price appreciation for a typical homeowner between July 2019 and July 2025.

New Construction Homes

Again, new home sales were flat this month due to high mortgage rates, rising construction costs, and economic uncertainty.

 According to the National Association of Home Builders (NAHB), sales of newly built homes declined by 0.6% in July, and the pace of new home sales is down by 8.2% from a year ago.

 The median new home sale price was $403,800, down 5.9% from last year. This is primarily due to home builders' use of sales incentives. In July, 17% of new homes were priced below $300,000, while 31% were priced over $500,000.

Housing Inventory

Both existing and new home inventory were slightly down month-over-month, but still improved over the last year.

 There was a 4.6-month supply of existing homes in July, down from 4.7 months in June but up from 4 months in July 2024, according to the NAR. In the new construction market, new single-home inventory was 9.2 months at the current sales pace, a 0.6% decrease from June, but a 7.3% increase compared to the same time last year, NAHB reported.

Mortgage Rates

Mortgage rates continue to decline.

 According to Freddie Mac’s Primary Mortgage Market Survey, the mortgage rate on a 30-year fixed-rate mortgage was 6.56% as of August 28, 2025. This marks a 10-month low.

 Purchase demand is on the rise, thanks to the drop in rates, but many prospective buyers still face affordability challenges. 

 JPMorgan predicts the Fed will cut rates in September (and four total times this year), but this doesn’t necessarily mean we’ll see a meaningful drop in mortgage rates. The Mortgage Bankers Association (MBA) predicts that mortgage rates will remain in the 6.5% to 7% range for the rest of 2025.

DC Housing Market Update

The Northern Virginia and D.C. housing markets continue to stand out from national patterns.

 According to the Northern Virginia Association of Realtors (NVAR), the Northern Virginia housing market again showed signs of moderation compared to the same period last year, despite gains in median home prices.

 The region’s median sold price increased by 3.4% year-over-year to $760,073, showing that there’s still plenty of buyer interest. The number of listings jumped by 43.4% compared to July 2024, but homes are sitting on the market longer as buyers weigh their options.

According to NVAR, we’re now seeing a more balanced market, but demand still remains strong.

Buyers and Sellers Are Pulling Back

There are an estimated 1.43 million homebuyers in the U.S. housing market, according to Redfin. While this may seem like a lot, this is the lowest level in records dating back to 2013 (besides the pandemic). 

 Home sellers are also pulling back. The number of sellers has dropped by about 14,000 since May. However, there are still 36% more sellers than buyers, which is the largest gap dating back to 2013.

 What does that mean? Buyers hold the power in today’s real estate market. Even in the D.C. area, the report shows that it's a buyer’s market, as the region has 18.1% more sellers than buyers.

 So why aren’t buyers taking advantage right now? High home prices, high mortgage rates, and economic uncertainty. It’s buyer-friendly right now, but only if you can afford to buy, Redfin noted.

 Despite the bad news, mortgage rates have been declining over the past several weeks. This could help bring more buyers off the sidelines.

Three Advantages of Buying a New Build Today

New home sales have been stagnant, but it’s not a market you should ignore when searching for a home.

One advantage of new homes is that buyers have more options. According to Keeping Current Matters, roughly 1 in 5 homes on the market are new construction. 

 You could also find a better price than you’d expect. With more new builds on the market, builders are motivated to sell, with 38% offering price cuts in July. The median price of a newly built home is lower than that of an existing home by about $30,000.

 You could also get a lower mortgage rate. People who buy a new home in this market usually get a rate around half a percent lower than those who purchase existing homes, thanks to builder incentives.

If you’ve been waiting for the right time to buy, today’s new build market could give you more choices, better pricing, and added savings that are hard to overlook.

Final Thoughts

The market remains a mix of opportunities and challenges. Buyers have more leverage than they’ve had in years, while sellers are still benefiting from strong equity gains. 

 If rates continue to trend lower this fall, we could see more buyers step off the sidelines and activity pick up. For now, patience and strategy will go a long way, whether you’re buying, selling, or simply keeping an eye on where things head next.

Looking to buy or sell in the DC area? Don’t navigate the complexities of the current housing market alone! Reach out today for expert real estate leadership.