In fall 2025, the U.S. housing market remains sluggish despite two recent interest rate cuts by the Federal Reserve.
After inflation peaked near 9% in 2022, the Fed aggressively raised rates to slow spending. By late 2024, inflation eased, prompting a monetary policy shift. Yet mortgage rates defied expectations, climbing back toward 7% instead of falling below 6%.
Economic uncertainty and sticky inflation had discouraged home buyers and sellers alike.
The Federal Reserve enacted quarter-point interest rate cuts in both September and October 2025, lowering the federal funds rate to 3.75%–4.00%, giving rise to optimism.
Mortgage rates were reported to be 6.32% on Nov. 4, according to the Mortgage Research Network.
Warren Buffett’s Berkshire Hathaway HomeServices noted market conditions in fall 2025 that homebuyers see as moving in a positive direction.
- Housing supplies are higher for 22 consecutive months.
- Home prices are stagnant.
- Price cuts are accelerating.
- Mortgage interest rates are contracting.
Berkshire Hathaway HomeServices sees turning point
Given these and other housing market data, Warren Buffett’s Berkshire Hathaway HomeServices suggests a pivot may soon take shape.
“Fall 2025 could be the turning point for homebuyers,” the company wrote. “Following the slowest spring-summer housing market in decades, market conditions are moving toward a more equitable balance between selling and buying a home.”
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But Berkshire acknowledges that questions remain around whether homebuyers will take the opportunity to get back into the market — and whether sellers will accommodate them.
“Each market is unique,” the company explained. “In areas with fewer than a four-month supply of homes for sale, sellers are in the driver’s seat, testing higher prices, declining contingencies, and favoring all-cash offers.”
“At six months’ supply, the power dynamic shifts to homebuyers,” it continued. “Buyers have more selection and bargaining chips, forcing sellers to lower their list prices and agree to concessions.”
Berkshire emphasizes regional housing market differences
The 2020 pandemic nearly plunged the U.S. economy into a severe recession, but several factors helped stabilize it. The rapid expansion of remote work, historically low interest rates, and the appeal of more affordable, livelier cities played a key role.
Many homebuyers from expensive regions such as California and New York relocated to states like Florida, Texas, and parts of the Southeast, Mountain West, and Ozarks, according to Berkshire Hathaway HomeServices.
These movers were drawn by the promise of larger homes at lower prices, favorable tax conditions, milder climates, and pro-business policies that made these destinations more attractive for long-term living and investment.
“The poster child for new beginnings is Austin, Texas,” Berkshire wrote. “Nestled in the foothills of Hill Country, Austin is the Live Music Capital of the World (as well as the state capital). The ultimate in Sun Belt charisma with a youthful vibe, hot weather, great food, and laid-back lifestyle, Austin is the tech mecca of an investment-friendly state.”
“The city benefits from a never-ending stream of eager IT-savvy graduates (courtesy of the University of Texas) and Silicon Valley-weary tech firms looking for tax incentives and higher profits.”
How Austin became a homebuyer’s market
- In 2021, Austin experienced a 30% year-over-year surge in home prices, fueled by its status as a pandemic-era hotspot.
- Interest rates later doubled, and developers responded with a wave of new construction, including rentals and single-family homes.
- New builds now account for 24% of Austin’s housing inventory, well above the national average of 17.3%.
- Slower job growth and excess supply have shifted Austin into a buyer’s market.
- Since August 2022, the city’s median home price has declined by 15%.
- Southern and Western metros are seeing the steepest price drops, with 19 of the 50 largest markets now below July 2022 price levels.
Homebuyers battle home-price fears
By mid-2025, home prices had declined in 110 of the nation’s 300 largest metro areas — more than three times the 31 metros that saw price drops at the start of the year, according to Berkshire.
Formerly booming Sunbelt states such as Florida, once known for widespread population growth and rising home values, now dominate the list of steepest annual declines.
Seven of the 10 metros with the largest year-over-year price drops are in Florida, including Punta Gorda, where prices fell 12%, and Cape Coral, which saw a 10% decrease.
The shift underscores a broader cooling trend in markets that previously led the pandemic-era housing surge.
“Many homebuyers are waiting to see how much further home prices will decline, fearful that they may purchase a home that will decrease in value,” Berkshire explained.
“In an economy where high home prices are coupled with mortgage interest rates double that of several years ago, homebuyers also fear over-paying for mortgages.”
Related: Home price hikes cause housing market highs; home sales struggle
