Buyers gained ground in 2025, but cost barriers still loomed large
Seasonal chill finally returned to the United States housing market in November, even as mortgage affordability improved to its best level in three years and buyers gained options not seen since before the pandemic.
According to Zillow’s latest market report, new listings declined nearly 30% from October to November. That's the steepest November drop since at least 2018, pulling annual listing growth from a 5.1% gain in October to a 4.4% decline.
Price cuts also eased, falling from near-record levels in October to roughly 21% of listings in November, a share more in line with pre-pandemic seasonal norms.
“Affordability is still a hurdle for home buyers, but 2025 brought real progress,” Kara Ng, senior economist at Zillow, said.
“Mortgage payments dropped by more than $100 a month, while incomes continued to rise. For many households, that small shift can be the difference between sitting out the market and finally being able to buy or sell a home. While sellers and buyers alike pulled back in November, reminding us that seasonality still matters, we expect the market to warm up a bit next spring.”
Affordability improved, but at a cost to activity
Zillow estimated that mortgage payments on a typical home required 32.6% of median household income in November, down from 35.7% at the start of 2025 and the lowest burden since August 2022.
At the same time, national home values were effectively flat, rising just 0.2% year over year, and more than half of individual properties saw values fall over the past 12 months, even as most owners still sat on gains since purchase.
In earlier analysis, Ng said buyers had been “gaining leverage that most of them can’t use, because cost barriers are too high,” underscoring how improved inventory and slower price growth still collided with elevated borrowing costs.
A separate Zillow report this year found home value appreciation nearly flat nationally, with affordability only “gradually improving” where construction expanded supply.
Market edges toward balance across key metros
Zillow’s heat index showed a patchwork market: strong seller conditions in high-cost hubs such as San Francisco and San Jose, buyer-leaning dynamics in Sun Belt metros including Miami, Tampa and Austin, and neutral conditions in large Midwestern and Southern markets such as Chicago, Dallas and Denver.
Rising inventory and longer marketing times are tilting more metros into buyer-friendly or balanced territory, even as affordability remain a “significant obstacle.” Another Zillow report this year highlighted that 27 major metros were already classified as balanced or buyer-leaning, up from 18 a year earlier.
Looking ahead to 2026, economists across the industry expect modestly lower mortgage rates and slower home price growth to keep nudging affordability in the right direction, but from a still-elevated base and with the lock-in effect likely to keep many potential sellers on the sidelines.
For lenders and originators, that leaves a market inching toward balance, where incremental gains in affordability matter more than headline price moves.
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