Seasonal cooling is seeping into the housing market after an unseasonably active fall, according to the latest market report from Zillow. Price cuts from sellers dropped back to normal levels from near-record highs; a rare instance of buyers losing some leverage in a year when many housing trends moved in their favor.
“Affordability is still a hurdle for home buyers, but 2025 brought real progress,” Kara Ng, senior economist for Zillow, said in a release. “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.”
Low mortgage rates in September and October pushed buyers and sellers to be more active than usual, but November saw a return to seasonality, despite mortgage rates that ticked down to 2025 lows, according to Zillow.
New listings from sellers fell nearly 30 percent month-over-month — the largest monthly November decline since at least 2018. This reversed annual growth in new listings, from 5.1 percent year-over-year in October to a 4.4 percent annual decline in November.
Calendar effects may explain some of the pullback in new listings: October has more Thursdays and Fridays than last year, and November has fewer — Thursday and Friday are the biggest days of the week for listing homes. However, the precipitous drop still marks the end of an unseasonably warm fall, as sellers reset before the coming year.
Price cuts from sellers also dropped, from being offered on a near-record 26.9 percent of listings in October to 21.2 percent in November, a share right in line with seasonal norms, according to Zillow. Sellers may be holding out hope that they get the price they want in the spring instead of cutting prices to attract a buyer.
Newly pending sales that stayed steady in October succumbed to the seasonal slowdown in November, falling 18.5 percent month-over-month while remaining 3 percent above last year.
The housing market continued to rebalance in 2025 in the wake of explosive cost increases early in the pandemic. Buyers saw several factors move in their favor over the course of the year. These are the biggest housing macro moves from 2025:
- Rates ruled the rhythm of the market. Spiking mortgage rates in early 2025 cooled the spring shopping season, keeping buyers cautious despite rising listings. Zillow market reports show that when rates eased over the summer, activity rebounded, pulling buyers and sellers back into the market before settling into normal seasonal patterns by November.
- Inventory increased, and buyers gained leverage. Inventory accumulated as sellers outnumbered buyers through the spring and early summer. Growth compared to the prior year peaked at 22.8 percent in March, and a longstanding deficit in inventory shrank from 24 percent below pre-pandemic levels on New Year’s Day to a 17 percent shortfall by the end of November.
- Home values flattened. Typical home values nationwide are up 0.2 percent over last year, a welcome reprieve for buyers who watched prices skyrocket in past years. At the property level, 53 percent of home values fell over the past year, according to Zillow research, but the vast majority of homes have gained value since their last sale.
- Affordability improved slightly. Affordability remains a major challenge, but it did improve slightly in 2025, thanks to declining mortgage rates, flattened home values and growing incomes. Monthly mortgage payments for a typical house required 35.7 percent of median household income at the start of the year (with a 20 percent down payment). That declined to 32.6 percent in November, the lowest since August 2022.
Zillow economists expect mortgage rates to continue their gentle path downward in 2026, helping home values and sales to bounce back after a flat year.