SEATTLE, WA — Home price growth largely froze in March 2025, a month traditionally marked by surging demand in the housing market. Zillow’s latest market report highlights sluggish appreciation, rising inventory, and affordability challenges that continue to impact both buyers and sellers nationwide.
The typical home value rose just 0.2% month-over-month in March, the slowest growth for this time of year since at least 2018. Nationwide, home values showed a modest 1.2% increase compared to March 2024. Inventory, however, surged, giving buyers 19% more options than a year ago. Total listings reached 1.15 million homes, representing the highest inventory level seen in March since 2020, though supply remains 24% below the 2018-2019 pre-pandemic seasonal average.
According to Zillow Chief Economist Skylar Olsen, “More sellers came out to test their luck as rates ticked down in March, but home sales didn’t keep up. Buyers — especially first-timers without equity to pour into their down payment — continue to struggle with affordability and now are facing even higher levels of uncertainty.”
Sellers listed over 375,000 homes in March, marking a nearly 9% year-over-year rise. However, newly pending sales remained flat at approximately 265,000, leaving unsold inventory to steadily climb. Meanwhile, mortgage rates dipped slightly, averaging 6.65% in March compared to 6.82% during the same period last year.
Although buyers have more options, affordability remains a key obstacle. A mortgage payment on a typical home requires 35.3% of the average median household income, staying well above the 30% threshold considered a financial burden. The upfront cost of a 20% down payment on a median-valued home sits at $72,000, further challenging first-time buyers.
With the market softening, price cuts reached record levels. Over 23% of March listings on Zillow were reduced, the highest percentage for any March in at least seven years. Regional disparities also continue to stand out, with metros in Florida and San Antonio experiencing month-over-month declines in home values, even as small nationwide gains persisted.
Looking ahead, rising inventory levels and an easing of competition may provide more opportunities for buyers as the spring market intensifies. However, affordability pressures and economic uncertainties will likely remain defining factors in the housing market’s recovery throughout 2025.
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