The 2025 Housing Market in Review: High Prices, Lower Returns

Home prices hit new highs in 2025—but sellers aren’t walking away with record profits. Despite a median home price of $360,000, homeowner profit margins have fallen over the past three years. Tim Lucas and Craig Berry break down why returns are shrinking, how regional markets are diverging, and what today’s shifting buyer demographics mean for the future of housing.In this episode you’ll learn:How profits are moving the wrong direction: Homeowners averaged $118,710 in profit in 2025, down from more than $124,000 in 2024 and $126,000 in 2022.Why margins are shrinking: Profit margins fell from roughly 62% to 49% in just three years.Why housing is increasingly regional: Markets like Birmingham, AL saw prices rise nearly 13%, while places like North Port, FL experienced declines around 9%.Which regions are holding firm: Northeastern markets continue to see strong gains and record-long homeowner tenure.Who’s buying homes now: The median age of repeat buyers has climbed to 62, reshaping demand and market dynamics.Why cash is king: Nearly 40% of homes are being purchased with cash—the highest share since 2013.Where investors are most active: Institutional investors account for about 6.6% of sales nationally, with higher concentrations in states like Tennessee, Texas, and Missouri.The big picture: Even with falling returns, national home prices rose 2.6% in 2025 and are now 39% higher than in 2020.Read the full article: https://www.mortgageresearch.com/articles/2025-housing-market-review-record-home-prices-lower-returns-sellers/