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📉Is a Housing Market Correction Underway? The Signs Are Hard to Ignore

May 21, 2025 | Market Trends, Real Estate | Presented by ReadySetLoan


The U.S. housing market may be shifting—and fast. With rising inventory levels, cooling sales, and falling new-home prices, some experts are signaling the early stages of a housing market correction. For first-time homebuyers in Connecticut, these trends could signal new opportunities.


🏨 Inventory Is Up, Sales Are Slipping


In April, the number of homes for sale surged to over 959,000 listings, up 30.6% compared to last year. However, monthly home sales slipped 3.2% year-over-year during the same period. This divergence between supply and demand has many watching closely.

Real estate investment firm First American Properties noted that 47 major U.S. metro areas have seen prices decline from their recent peaks. Among them are high-growth regions like Austin, TX and San Francisco, where home values have dropped nearly 10%.

According to First American’s CEO Michael Eisenga, “What we’re seeing now, particularly with rising inventory and declining pending sales, are the early signs of a correction already playing out in several markets.”

If you're looking to buy your first home in Connecticut, this shift could bring more leverage to the negotiation table.


🐷 RSL Piggy Points:

  • 🐷 New-home prices have dropped for eight straight quarters, says the National Association of Home Builders.

  • 🐷 In cities like Milwaukee, home prices have skyrocketed by 160% since 2019.

  • 🐷 The price gap between new and existing homes has shrunk from $64,000 in late 2022 to just $14,600 in early 2025.

  • 🐷 With incentives like rate buydowns and closing cost credits, that price gap could disappear altogether.

  • 🐷 For Connecticut homebuyers, a slowing market might bring affordable housing options back into focus.


📊 A Market of Contrasts


While the Southeast and Sun Belt are cooling, the Midwest and Northeast have so far stayed relatively insulated. But even that could change. Cities like Madison, WI—which saw a 35% gain in home prices—may not remain immune.

For those navigating the Connecticut housing market in 2025, understanding the contrast between new and existing homes is key to making smart decisions.

“This trajectory aligns with previous deep national corrections,” Eisenga said. “That’s something buyers, sellers and investors need to keep in mind as we move further into 2025.”


🏁 RSL Perspective


At ReadySetLoan, we believe market transitions are opportunities, not obstacles. Whether you’re waiting for the right moment to buy or want to understand how changing trends could affect your refinance options, we’re here to educate and empower.


🎤 Neil’s Take


“When we talk about corrections, we’re not just talking about falling prices—we’re talking about the return of negotiating power for buyers,” says Neil Caron, Area Manager at CMG Mortgage. “Sellers are offering more concessions, builders are adjusting pricing, and buyers who understand the full picture can capitalize. This is a moment where strategy matters more than ever.”


Neil adds, “Now’s a great time to ask your lender the right questions: Are there builder incentives available? Can I use seller credits to buy down my rate? What’s the total cost of ownership? Because those details can turn a tricky market into a golden opportunity.”


📣 Ready to take advantage of the shift?


Let ReadySetLoan guide you through it all—from understanding builder incentives to mastering negotiation strategies in the Connecticut market.



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