The Next 6 Months in Housing: More Inventory, A Modest Rate Tailwind, and a Foreclosure Drip
September 18, 2025
TLDR
The housing market has been quietly loosening: existing-home sales in July ticked up to a 4.01M pace, inventory climbed to 1.55M (about 4.6 months of supply), and prices eased off June’s peak but still sat around $422,400 year over year. Physician Mortgage rates were hovering near a 10-month low around 6.58%, which helps—but it’s not enough, by itself, to magically fix affordability. Foreclosures and delinquencies were creeping up, not exploding—more “drip” than “wave.”
Looking into winter, the vibe stays more buyer-friendly than it’s been: inventory likely keeps building, price cuts and concessions become more common (especially on stale listings), and rates may drift but probably stay choppy. If you’re buying, the win isn’t waiting for a giant rate drop—it’s using increased selection + negotiating leverage (credits, buydowns, repairs) to make the numbers work. If you’re selling, pricing correctly and being open to concessions is how you keep momentum when buyers have more choices.
Where we are now
Sales & supply: July existing-home sales ticked up to a 4.01M seasonally adjusted annual rate. Inventory rose to 1.55M homes (about 4.6 months’ supply)—the highest in years—signaling a market that’s loosening. Prices eased from June’s peak but remain ~$422,400 year over year. National Association of REALTORS®ReutersThe Wall Street Journal
Rates: The average 30-year mortgage rate is hovering near a 10-month low (~6.58%)—helpful, but not a game-changer on its own. AP News
Distress: Foreclosure activity is edging higher, not spiking. Mid-year filings rose ~5.8% vs. 2024, and July filings were up ~13% year over year (the 2025 high so far). Delinquencies also nudged up in Q1. ATTOMHousingWireMBA
What’s likely next (through February 2026)
Inventory keeps building (slowly). With more listings and longer days on market, buyers gain leverage. Expect more price cuts this fall, especially in overheated Sun Belt pockets. (NAR and multiple outlets note rising months’ supply and growing share of discounted listings.) National Association of REALTORS® The Wall Street Journal
Rates: mild help, not a rescue. Markets are leaning toward a quarter-point Fed cut in September, with odds of another by year-end. That may nudge mortgage rates lower—but remember: mortgages follow the 10-year Treasury and investor inflation views, not the Fed funds rate directly. Net: rates likely stay in the mid-6s, with volatility around Fed events. Reuters AP News
Foreclosures: watch the drip, not a wave. ATTOM’s data shows gradual increases in starts and completions. We expect elevated—but still historically contained—activity as higher payments and job churn bite some borrowers. Track monthly prints for acceleration. ATTOMHousingWire
Pricing: flatter nationally, divergence locally. With supply rising and affordability still tight, look for flat to low-single-digit gains nationally, with softer conditions where inventory has surged. (July price growth already slowed.) Reuters
What this means if you’re buying or selling
Buyers: More choice and negotiability ahead. If the payment works at today’s rate, consider moving—small rate dips may not dramatically change affordability, but better inventory + price flexibility can. AP News
Sellers: Price to the market and prep for longer marketing times. Concessions (rate buydowns, credits) can keep deals intact as buyers compare a growing set of options. Reuters
Physician borrowers: Use physician-mortgage preapprovals to lock timelines around contract start dates and student-loan treatment; then shop terms across physician programs—not just a mainstream bank. Rising inventory improves your leverage even if rates only drift down. (Context from NAR on supply; rates from AP.) National Association of REALTORS®AP News
Bottom line: Expect a gradually more buyer-friendly market through winter: more listings, modestly easier rates, and a slow uptick in foreclosures that adds a bit to supply—but no 2008-style surge. Latest market coverage you can scan quickly
US existing home sales tick up unexpectedly in July
Average rate on a 30-year mortgage holds steady at lowest level in nearly 10 months
