This week’s real estate headlines have me reflecting on how a once red-hot market is shifting. On the national front, home sales are tumbling and inventory is finally piling up. Meanwhile, here in North Carolina our market is showing both the glow of sustained demand and the chill of higher rates. Globally, we’re even seeing some curious headlines – from Canadian cities waking up after a trade-war scare to “death-tainted” Japanese homes being snapped up as prices soar – all of which have lessons for buyers and sellers at home.
U.S. Housing: Sales Slump and Inventory Surge
The big U.S. news is hard to miss: new home sales plunged in May. The Commerce Department reports sales of new single-family homes fell 13.7% in May (to a 623,000 annual pace), the steepest drop in years. That jump in inventory pushed unsold new homes to the highest level since 2007. In fact, there are roughly 507,000 new houses on the market now – about 9.8 months of supply – compared to a balanced market around six months. The median price of a new home is still high (about $426,600, up ~3% YoY), but builders are reluctantly offering incentives or price cuts to lure buyers. With 30-year mortgage rates hovering near 7%, buyers are understandably cautious. The NAHB builder sentiment index has now sunk to a 2½-year low, reflecting concerns that high rates and rising material costs (hello, tariffs on lumber and steel) will keep sales soft.
Existing home sales had a slight uptick but tell the same story of weakness. May’s existing-home closings were about 4.03 million (annualized) – up 0.8% from April but still 0.7% below last year. That 4.03M pace is actually the slowest May since 2009. Inventories are rising: there were 1.54 million existing homes for sale in May, up 20% YoY, which translates to roughly a 4.6-month supply of homes (for context, 4–7 months is generally “balanced”). The median existing-home price hit a record high around $422,800 in May, but with more homes on the market, price growth is softening. In short, the market isn’t flaming out overnight – it’s cooling. Buyers are finally seeing more options and negotiating power than a year ago, and sellers are feeling the need for realistic pricing and incentives.
A few more national nuggets: Pending home sales (signed contracts) actually rose 1.8% in May, suggesting some deals are moving forward despite high rates. Weekly mortgage applications are modestly higher than a month ago (Fed Chair Powell’s recent testimony calmed markets a bit). But overall the theme is “buyer’s market creeping in”, as one analyst put it. Americans now have record levels of homes listed for sale – Redfin says there’s about $700 billion worth of homes on the market nationwide, an all-time high by dollar value. That’s why many outlets are calling 2025 a very subdued year for housing (some warn it could be the worst in decades).
North Carolina is feeling this too. According to the NC REALTORS® May 2025 market report, active listings jumped +25.7% year-over-year (to ~67,500 homes) while closed sales fell –8.5%【24†】. The median sale price in NC ticked up slightly to $374,994 (+2.1% YoY)【24†】, and overall months of inventory climbed to 5.7 (just shy of a balanced 6 months)【24†】. In plain language: buyers have more choices than they did last spring, and sales are spreading out over a longer time. Entry-level buyers, in particular, should see more openings and price stability than in the frenzied past.
North Carolina Highlights
It’s not all numbers – local news here shows how our market’s pulse is changing. Investment firms are still excited about NC, but they see caution. Triangle Business Journal reports that Florida-based Saunders Land (a big farmland broker) is opening a Raleigh office to focus on eastern NC land deals. In other words, investors are eyeing North Carolina’s growth, but the deals are specialized (farmland, development sites, etc.) rather than housing subdivisions.
Over in the Charlotte area, some projects hit slowdowns. The Charlotte Business Journal ran a headline June 25: “Huntersville rejects national builder’s plans for 259 homes.” In that case, NVR (Ryan Homes) was denied rezoning for a 259-unit subdivision amid concerns about infrastructure and roads. Another planned mixed-use site in Huntersville was also put on pause for now. These sorts of zoning decisions don’t make national news, but they remind us: even with demand, communities are more discerning about growth. I expect a few high-profile North Carolina projects will see revisions or delays in this environment – nothing sinister, just more prudence.
On the bright side, our state’s desirability isn’t fading. Redfin’s data shows North Carolina is one of the top five destination states for American homebuyers this year. In a recent survey period (Feb–Apr ’25), NC trailed only Florida and Arizona as popular move-to states. That makes sense: job growth, good weather, and (still relatively) affordable housing keep people moving here. Right now those relocating buyers have plenty of leverage. With prices up but not exploding, and lots of listings available, an out-of-state buyer can afford to be choosy about location and terms.
Commercial real estate in NC sees similar caution. Retail and office developers are watching consumer spending carefully. For example, a Charlotte developer just closed on a 2.3-acre site for future retail (northwest Charlotte, paid ~$3.5M). That’s a sign banks are still funding projects, but generally at steady, conservative rates. Office and industrial deals will likely take a breather too unless interest rates come down.
Global Snapshot
Stepping back, a few international headlines caught my eye. In Canada, the market might be thawing just as ours cools. An RBC study (reported by Global News) noted that home sales in some Canadian markets picked up in May after months of fear over trade tariffs. In Toronto, for instance, resales jumped 8.4% MoM as trade tensions eased. Their takeaway: when the storm of tariff uncertainty calms, buyers slowly come back. That’s a useful parallel: if U.S. economic or trade worries fade, our market could revive a bit too.
On a weirder note, Japan made news with its “misfortunate properties.” This has zero impact on NC, but it’s a fascinating quirk: Reuters reports that as Tokyo prices soar (up over 33% YoY for condos), even homes with a stigma (suicides, murders, lonely deaths) are getting buyers. Essentially, investors are so desperate for yield that they’re snatching up houses that once sat abandoned. The moral? When prices skyrocket, even the quirkiest properties find a price, but when markets are softer (like in North Carolina now), buyers can focus on standard homes without desperation creeping in.
What This Means for You
To wrap up, buyers in North Carolina and nationwide are gaining ground. More inventory and stable rates mean you can afford to bargain or wait for incentives. Sellers, meanwhile, need to price realistically and highlight any upgrades to stand out (as mortgage-proof buyers get choosier). Commercial and development plans will get built, but carefully – approvals might take longer and financing will be structured conservatively.
Interest rates are the wild card. If mortgages drop later this year (many analysts expect a cut in late 2025), we could see a modest pickup in demand. For now, though, buyer leverage is up and the market is patient.
We write this weekly blog as real estate pros to help you connect the dots. Stay tuned for next week’s update, and don’t miss out on our newsletter: subscribe to Brazoban’s weekly market update for more insights from a North Carolina perspective.
Sources: We pulled official data and news reports to compile this recap. Key references include Reuters (new/existing/pending home sales reports), Business Insider analysis of housing inventory, the NC REALTORS® monthly market report (May 2025)【24†】, and local media like Triangle Business Journal and Charlotte Business Journal. (Click the links above for full articles and data.)
