Exploding Inventory, Price Cuts, and a Market Heading for a Reset
If you’re a factoring broker or consultant considering a home purchase this year, it may be time to hit pause — especially if you’re counting on rising home values to justify the investment.
The U.S. housing market is undergoing a massive shift, and it’s not in the direction many hoped for. While post-pandemic headlines were filled with bidding wars and record-breaking price appreciation, the reality in 2025 is starkly different: the gold rush is over, and the correction is underway.
Inventory Is Exploding: Everyone’s Heading for the Exits
Real estate tracking platforms like Zillow, Redfin, and Realtor.com are now showing record-breaking numbers of listings. In many major metros, home inventory has doubled or tripled compared to the same period last year. Why?
- Investors who bought in 2020–2022, expecting quick profits, are now cashing out
- Homeowners facing higher costs of living and rising insurance premiums are offloading second properties
- Builders of new construction are flooding the market with unsold inventory — and slashing prices to move product
As a result, inventory is far outpacing demand, pushing prices downward.
Time on Market Is Rising… Fast
One of the clearest signs of a cooling market is Days on Market (DOM) — and it’s climbing rapidly in nearly every region of the U.S. What once sold in 5–10 days is now languishing for 30, 60, even 90+ days, even with price cuts.
For homeowners, this means more time paying mortgages, taxes, and maintenance on properties they hoped would move quickly. For buyers, it signals we’re entering a buyer’s market — but it’s not done falling yet.
The Rising Cost of Holding a Falling Asset
Many homeowners and property investors are now facing a triple threat:
- Declining property values
- Skyrocketing insurance premiums (especially in disaster-prone states like California and Florida)
- Increasing property taxes, driven by inflated assessments from peak 2021–2022 valuations
Combined, these forces have turned what many saw as a wealth-building asset into a rapidly depreciating liability. This is especially painful for those who bought at the top and are now watching their equity evaporate.
Builders Are Slashing Prices — Adding More Downward Pressure
New home builders are in a bind. They overbuilt during the boom and now face mounting carrying costs on unsold properties. Their response?
- Aggressive price reductions
- Incentive packages (rate buydowns, closing cost coverage)
- Increased commission offers to buyer agents
This puts even more pressure on existing home sellers, many of whom can’t compete with new construction discounts and warranties.
What This Means for Brokers and Consultants
As a factoring broker or commercial finance consultant, you’re trained to evaluate risk, timing, and cash flow. The current real estate environment should raise red flags.
If you’ve been considering buying a home:
- Don’t rush into a depreciating asset
- Watch market signals, especially inventory, DOM, and local price trends
- Consider renting — especially if your business is growing and flexibility is key
Remember, a drop of just 10% on a $400,000 home wipes out $40,000 in value — not including closing costs, taxes, and repairs.
Take Your Time…Wait for the Bottom…Then Buy Smart
“Smart money waits for clarity, not headlines.”
The market is shifting, and prices have not yet come close to being stabilized. If you’re entering the housing market soon, treat the decision like any other investment:
- Know the local fundamentals
- Understand your risk tolerance
- Avoid emotional purchases
Renting for 12–24 more months while the market resets could save you tens or even hundreds of thousands — and position you to buy when value, not hype, returns to the housing sector.