Redfin Warns Housing Bubble Could Deflate in 2025
Redfin's 2025 Housing Market Outlook While the U.S. housing market has enjoyed years of robust growth, changes may be on the horizon. Redfin warns that the bubble shows signs of deflating by 2025. Rising mortgage rates, increasing home inventories, and faltering buyer demand all suggest a cooling period. This shift is poised to challenge market dynamics and buyer confidence. Elevated mortgage rates have proven to be a formidable barrier. With rates hovering around 7%, affordability for potential buyers is critically impaired. Many prospective homeowners are postponing purchases or canceling contracts altogether. In April 2025, nearly 56,000 cancellations were recorded, marking the second-highest rate on record. Sellers are adjusting strategies as mortgage rates pressure affordability. Increasing home inventories further affect market stabilization. The housing market's cooldown is underscored by the 16.7% increase in total inventory year over year, which is the highest level i...