September 5, 2025 Economic and Housing Market Update

September 5, 2025

Overview:

Reports and articles referenced:

Housing data for download:

VIDEO TRANSCRIPT:

• I’m Danielle Hale, Chief Economist at Realtor.com®. In this holiday-shortened week, I’ll discuss this week’s labor market reading and discuss what it says about the economy. I’ll review the latest drop in mortgage rates and weekly housing market data before taking a step back to appreciate how much the housing market has changed in the last quarter century.  Finally, I’ll dig in on the latest Realtor.com Housing and Climate Risk Report. 
• First, the jobs report showed that while hiring continued, the pace slowed yet again. Employers added a net 22 thousand jobs to payrolls. Unemployment ticked up, and wages continued to advance, but at a slower pace.
• Data earlier in the week on July labor turnover showed that the gradual slowdown in the labor market has led to a significant milestone: the number of unemployed job seekers outnumbered job openings for the first time since April 2021.
• There was already near-certainty among investors that we would see a Fed rate cut in September, and neither the jobs report nor potential personnel changes seem to have altered that sentiment. At the next Fed meeting, I’m watching to see what the Fed’s projections suggest about its views on economic growth and appropriate policy over the next year or so.
• As we move closer to the anticipated Fed rate cut, mortgage rates edged lower, dropping to 6.5%, their lowest in 11 months. The improvement is good news for those currently shopping, and may spur refinancing among those who took on mortgages 2 years ago, when rates were highest. Nevertheless, it’s likely not low enough to spur significant unlock for existing homeowners with a mortgage, 81% of whom have a rate below 6%.
• Underscoring that point, weekly data show that new listings continue to grow, but momentum has faded as price growth has flattened. Even as time on market lengthens, active listing growth has also slowed. 
• These data point to conditions that are not as favorable for sellers as we’ve seen in recent years, but a recent Realtor.com analysis found that 1 in 4 homeowners has lived in their home for over 25 years. 
• Considering that tenure, today’s housing market is much different than the market these homeowners bought into. The affordability picture has shifted dramatically as home construction has lagged, yet months supply signals more buyer market-power than any time in roughly the last decade. The substantial equity these homeowners have accrued, likely a multiple of their original purchase price, gives them options if they choose to sell, they may just need extra time and some expert guidance to acclimate to all of the shifts.
• Finally, as the country navigates hurricane season in the South and East and fire season out West, we issued a Climate Risk Report. We found that more than $12 trillion in real estate value are exposed to severe or extreme risks from flooding, hurricane-driven wind, and wildfire. These risks are spread unevenly, and this is reflected in variations in homeowners insurance costs when tend to be just less than 1% of a home’s value each year in many areas, but exceed 3% in some of the highest-cost markets.
• You can find all the details, including full reports and our housing data for download, at realtor.com/research.  You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.

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