Housing Inventory Reaches Highest Level Since 2020 — But Buyers Are Still Cautious

A surge in home listings gives the market more breathing room, but affordability challenges continue to hold buyers back.

The spring real estate season kicked off with a notable rise in housing inventory. According to Zillow’s March 2025 housing market report, more than 375,000 homes were listed last month—a 9% increase over the same time last year. It’s a sign that sellers are returning to the market in greater numbers, helping to ease some of the intense supply constraints of recent years.

Even with this increase, new listings are still 19% below pre-pandemic March levels, but the overall trend is moving closer to seasonal norms. Total housing inventory reached 1.15 million homes, up 19% year-over-year—the highest level since March 2020.

Buyers Remain Cautious

Despite rising inventory and slightly lower mortgage rates, buyer activity has not accelerated. Zillow reported flat pending sales compared to last year. About 265,000 homes went under contract, which is significantly fewer than the number of new listings.

This imbalance between new supply and demand reflects the ongoing affordability squeeze. While mortgage rates averaged 6.65% in March, down from 6.82% the year before, the typical monthly mortgage payment—assuming a 20% down payment—reached $1,855, which still consumes over 35% of the median household income.

Price Growth Slows, Cuts Rise

As competition cools, sellers are adjusting their pricing strategies. Zillow reported that 23% of listings received price cuts in March—the highest share for any March since at least 2018. Home values rose just 0.2% month-over-month, the slowest growth for this time of year in over six years.

Several major metro areas, particularly in the Sun Belt, are seeing prices decline. Monthly home value drops were recorded in:

• Miami, FL (-0.4%)

• Tampa, FL (-0.3%)

• Orlando, FL (-0.2%)

• Jacksonville, FL (-0.1%)

• San Antonio, TX (-0.1%)

Year-over-year, 16 metro areas saw declining home values. Leading the list:

• Austin, TX (-4.6%)

• Tampa, FL (-4.5%)

• San Antonio, TX (-2.7%)

• Phoenix, AZ (-2.5%)

• Dallas, TX (-2.4%)

What This Means for Homebuyers

Buyers today have more choices, less competition, and room to negotiate—but they still face real financial hurdles. “We’re entering a market that’s finally loosening up,” says Neil Caron, Area Manager at CMG Mortgage. “But with affordability strained, education is more important than ever.”

Looking Ahead with ReadySetLoan

At ReadySetLoan, we help homebuyers navigate shifts like these with clarity and confidence. Whether you're considering your first purchase or planning your next move, our platform offers tools, insights, and real-world guidance to keep you in control of your financial future.

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