WHAT HAPPENED IN THE THIRD QUARTER OF 2025

The metropolitan housing market showed resilience in the third quarter despite sluggish conditions. Closings varied by region, with strong activity in Westchester, the Hudson Valley, and Fairfield, while Northern New Jersey lagged slightly behind. Encouragingly, pending sales rose significantly across all markets, suggesting stronger performance ahead. The increase in pending contracts indicates growing buyer engagement and points to a potential rebound as the market finds stability after two years of decline.

Home prices, however, continued their relentless climb, reaching new all-time highs throughout the region. Average sale prices rose between 5% and 10% across all major markets, extending a trend of appreciation that began in mid-2020. Despite higher interest rates and affordability challenges, buyer demand remained robust, fueled by limited inventory that has kept the market firmly tilted toward sellers. The scarcity of available homes continues to create competition among buyers, sustaining upward pressure on prices even in the face of economic uncertainty.

Meanwhile, the supply side of the market showed renewed constraints. Earlier in the year, rising listings offered hope that inventory shortages were easing, but the third quarter saw that progress stall. Listings flattened or declined in most areas, with inventory levels falling below four months’ supply — far short of the six months considered balanced. Until more homes enter the market, prices are unlikely to stabilize, and buyers will continue to face tight conditions as the region grapples with ongoing supply-demand imbalance.