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U.S. Housing Prices Hit Record High in 2025—What It Means for Buyers, Sellers, and Investors

Affordability Crisis Deepens Despite Slowing Demand, Rising Listings, and Fed Rate Forecasts

Author

Kyle Allgair
June 20, 2025

Welcome back to KPA Wealth. In this week’s housing market update, U.S. home prices hit a record high of $396,500—raising new concerns about affordability in the 2025 real estate landscape. That’s $26,000 below the median asking price—a sign that buyers are regaining negotiation power in today’s cooling housing market.

Also in this edition: How HubSpot’s AI Assistant is transforming business productivity, and why a record-breaking password leak is your wake-up call to tighten cybersecurity.

Today’s Topics

Housing Prices Hit All Time High Even With Difficult Affordability

The Paradox of 2025: Record High Home Prices Amid Weak Demand

Despite a soft spring market, the U.S. median home-sale price has reached a new record of $396,500—a 1% increase year-over-year. Yet this seemingly bullish stat hides an important truth: most homes are selling below asking price, with a $26,000 gap between the median sale and asking prices. The current median list price stands at $422,238, highlighting a rare market inversion compared to the seller-favored dynamics of 2021–2022.

So why is this happening? Because while prices are historically high, buyer demand is still weak. Listings are rising (+14.5% YoY), but pending sales are down (-1.5%). Mortgage-purchase applications are slipping, and the median monthly payment—now at $2,820—is just $53 shy of its all-time high.

Seller Supply Outpaces Buyer Demand

This is a market where sellers outnumber buyers, and that imbalance has put pressure on sellers to negotiate. As a result, homes are often sitting on the market longer, with a median of 36 days, and only 28.6% of homes are selling above list price (down from 32%).

Kyle’s Take: This Market Is Illogical But Understandable

Let’s face it—how are home prices hitting all-time highs when so many buyers are priced out?

The truth is, the market isn’t behaving like a rational supply-and-demand curve. Instead, sticky inflation, delayed rate cuts, and buyer hesitation are distorting price signals. We’re seeing a split between what homes are worth on paper and what people are willing (or able) to pay.

I’m seeing this play out with clients every week—especially first-time homebuyers. They’re stuck in a catch-22: rents are still high, but so are mortgage payments. Even though they have some negotiating power now, it’s often not enough to bring homes into reach.

And yet, prices remain elevated. Why? Because sellers are holding out. Many are locked into sub-4% mortgages from 2021 and don’t have to sell unless they get close to their list price. So instead of dropping prices, they’re just waiting longer or pulling listings altogether.

Leading Market Indicators to Watch

Here's what the latest national housing data tells us:

  • 30-Year Fixed Mortgage Rate: 6.81% (still high, but slightly down from May)

  • Pending Home Sales: Down 1.5% YoY

  • New Listings: Up 4.4%

  • Active Listings: Up 14.5%

  • Sale-to-List Price Ratio: 99.1% (down from 99.6%)

Meanwhile, Google searches for "home for sale" are up 10%, and touring activity is up 36% since January. That means interest is creeping back—but not necessarily commitment.

Where Do We Go From Here?

Expect home prices to soften slightly toward year-end as the supply-demand mismatch continues and mortgage rates remain high (Rates may edge down if the Fed follows through on its expected cuts—but don’t bet on dramatic drops). But don't count on a crash—sellers are stubborn, and inventory is still limited in hot markets.

If you’re a buyer, use the power of negotiation. Sellers are more flexible than they were a year ago. And if you’re a seller, be realistic. Price strategically, prep your home well, and don’t expect a bidding war unless your property truly stands out.

BOTTOM LINE:
We’re in a strange moment: record housing prices in one of the least affordable markets in history. It’s a tug-of-war between market math and emotional inertia. Whether you’re buying, selling, or investing—stay smart, stay strategic, and always know your numbers.

🤖 How HubSpot’s AI Assistant Can Supercharge Your Business

Overwhelmed by busywork? HubSpot’s AI Assistant is here to help you take back control of your day. This is one of the coolest AI tools for sales and marketing.

Built directly into the HubSpot platform, this AI-powered tool helps you:

  • Draft emails, blogs, and marketing content in seconds

  • Automate repetitive tasks in your CRM, marketing, and sales pipelines

  • Stay organized with centralized AI tools you can access anytime

  • Launch smarter campaigns with AI-optimized subject lines and messaging

  • Monitor results and optimize performance with built-in analytics

No fluff—just practical features that help you move faster and focus on what matters. Whether you’re writing content or managing customer relationships, HubSpot’s AI Assistant keeps your workflow smooth and efficient.

Who doesn’t love CRM automation with AI?

📰 The 16 Billion Password Leak That Finally Made Me Take Cybersecurity Seriously

I usually ignore password leak headlines—most feel like fear-mongering. But the news that 16 billion login credentials were just exposed? That got my attention. This wasn’t recycled data from old breaches. It was fresh, active passwords for services like Google, Apple, Facebook, and even government sites.

And yes, I checked all my logins immediately.

The crazy part? This wasn’t a single breach. It’s a collection of supermassive datasets, many from infostealer malware or misconfigured cloud servers. Which means anyone reusing a password (guilty!) is now wide open to phishing, account takeovers, and worse.

That’s when I made the switch. I ditched my old password “system” (aka clever variations) and finally started using a password manager. I went with 1Password, but you’ve got great options—Bitwarden, Dashlane, you name it. No more guessing. No more reuse.

Then I took it further and started using passkeys wherever I could. If you haven’t tried them yet, they’re a game-changer. No passwords to type, just Face ID or a fingerprint. Apple, Google, and Facebook all support them now. Setup takes minutes, and they’re basically phishing-proof.

The way I see it, this password leak is more than just a headline. It’s a sign that the old rules don’t work anymore. If you’re online (and who isn’t?), you need to update how you think about online security. Password managers, passkeys, and two-factor authentication aren’t extras—they’re the new basics.

I’ll be honest: making the switch was easier than I expected. And once I did, I felt a huge sense of relief. No more nagging worry about whether my reused password just got dumped onto some dark web marketplace.

If you’ve been putting off tightening up your cybersecurity, let this be the moment. You don’t want to be the person recovering from a hack you could’ve easily prevented.

☕ Stock of the Day: Reddit (RDDT) Stock Analysis Q1 2025

Alright, Reddit (RDDT) just dropped one of the strongest social media earnings reports I’ve seen in a while.

🧾 The Numbers That Jumped

Q1 2025 revenue came in at $392.4M—up a wild 61% YoY. Daily active users? 108.1M, up 31%. And get this: they actually turned a profit, with $26.2M in net income and $115.3M in adjusted EBITDA. This isn’t a hype play anymore—they’re cash flow positive with barely any CapEx. EPS landed at $0.13 vs. the $0.02 expected.

They guided Q2 revenue to $420M, way above estimates. The market clearly liked it—stock ripped 15%+ after hours.

🐂 Why I’m Intrigued

  • Profitability is here, and margins are strong. That’s rare for a platform still in its growth phase.

  • I underestimated how sticky and monetizable Reddit’s audience is. The ad revenue growth proves that.

  • Zero CapEx story. They’re printing free cash flow and barely spending—huge upside for long-term holders.

🐻 Stuff That Still Bugs Me

  • Valuation is wild. It’s trading at a P/E over 160. That’s nosebleed stuff.

  • Heavy dependence on ad revenue. One bad quarter or macro ad freeze and this thing could unwind fast.

  • Google’s AI changes could shift traffic patterns in a big way, and Reddit’s reliant on being part of those search results.

🎯 My Take

I’ll be honest—I didn’t expect this kind of maturity from Reddit this soon. This is starting to look like a legit cash-flow growth story, not just a quirky internet forum IPO. But with the run it’s had, I’m not chasing here. If it dips back into the $120s, I’m very interested.

For now, it's a watch for technical support and signs the DAU growth can sustain. Either way, this one’s on my radar in a serious way.

🏠 Today’s Mortgage Rates + 2025 Outlook

📉 Forecast: Rates Still Pointing Down—Slow Grind, Not a Slide

Mortgage pros agree: rates are likely to ease, but we’re not headed for a freefall. As of today, the average 30-year fixed sits around 6.8%, and expectations are for a gradual descent through the rest of summer.

🏠 Housing Hits Record High

That comes as U.S. home prices just hit an all-time high—$396,500, according to Redfin. Supply’s still choked, and housing starts are dropping fast, down 9.8% in May. So yes, affordability is still brutal, and rising home prices could offset any modest mortgage relief.

🧮 What the Forecast Models Say:

  • Fannie Mae expects rates to settle near 6.1% by year-end

  • Top economist Jon Dovidio sees a “gradual decrease over summer 2025,” especially if the Fed cuts twice as signaled

🧠 My Personal View

I’m leaning bullish (on rates falling). We’ve got:

  • The Fed publicly hinting at 2 rate cuts

  • Inflation cooling, even if slowly

  • A housing market still running hot, but not overheating

That said, geopolitical tensions, tariffs (like those pushing Aussie home costs up $10K), or another oil price shock could jam this whole setup.

📌 Here’s What I’m Telling Clients Today:

  1. Don’t hold out for a miracle drop. If you’re comfortable in the mid‑6% range, that’s still historically solid—lock it.

  2. Rate shop aggressively. A 0.25% difference could mean tens of thousands over the life of your loan.

  3. Push for Seller Credits. If the home allows, these can shave your rate by up to 1% through a buydown—huge win if you can get it.

TL;DR:
Mortgage rates are trending gently lower, but don’t expect fireworks. With housing prices at record highs and rate cuts on the horizon, now’s the time to shop smart, negotiate hard, and lock when you’re close to your comfort zone.

🚀 Must-Have AI Tools for Real Estate & Financial Pros

Kyle Allgair
CEO of KPA Wealth
📞 (279) 977-8149 | ✉️ [email protected]
🌐 KPAhomeloans.com

Kyle Allgair is the CEO of KPA Wealth, and is continuously helping clients build wealth through real estate and strategic financial planning. Contact him for personalized advice on achieving your financial goals.