The Housing Market Gap Is Bigger Than We've Seen In Years. Here's What That Means For You

What is your status as a homeowner in late 2025? Potential buyers and sellers are now at a similar advantage and disadvantage, respectively. The housing market gap is yawning to a width not seen in well over 10 years. The proverbial tennis match between supply and demand has led to nearly 40% more sellers than buyers this October. Because of this, the limited supply of shoppers has more room to negotiate a lower price. However, instead of inspiring more sales, prospective homeowners are backing off from house hunting altogether, and sellers are pulling out of the market.

Is buying a house still hard in 2025? Well, if a home purchase is on the horizon for you in the near future, you could stand to come away with a real steal. With sellers majorly outnumbering buyers, there's a robust selection to choose from, which creates room for bargaining. For those in better financial straits than others, this is great news. However, those hoping to sell are not likely to come away with enough of their homes' potential value. Also, in keeping with the back-and-forth nature of the housing gap, sellers have been pulling out of the market over the course of 2025 due to low demand.

Still, real estate professionals are hesitant to consider the current conditions a "buyers' market," since homeownership is far out of reach for many Americans. In fact, the number of first-time homebuyers is at its lowest point since 1981, while wealthier buyers making cash offers are coming out ahead.

For those waiting for better days to jump into the housing pool, both optimists and pessimists may feel the five-year housing market predictions confirm their beliefs. Yes, we should expect a steady increase in sales of both new houses and sellers listing their homes, but this is expected to happen slowly. As 2025 is wrapping up, many potential first-time homebuyers feel that finding a starter home is a lost cause. U.S. News and World Report foresees mortgage rates as being the clincher for how well sales will improve by 2030. Although mortgage rates increased for November amid the government shutdown, historically, there has been a general downward trend.

If you were fortunate enough to secure a mortgage rate of 6% or lower, you're unlikely to repeat this any time soon. The real threat of a much higher new mortgage rate has homeowners sitting on their investments for the time being. Long-term economic effects of Trump's tariffs and mass deportations of immigrants are still uncertain. The Federal Reserve doesn't foresee inflation dropping significantly over the next few years, but there are clues pointing toward higher inflation as a consequence of both the tariffs and deportations.