The number of new homes sold decreased in 2025 and remained below the levels observed during the 2020-2021 housing boom. Conventional loans are the most popular financing option for homebuyers, accounting for 497,000 of the 679,000 home purchases in 2025. Cash purchases, which comprise a small share of sales, have declined over the past years after reaching a record high in 2022. This could be explained by the dramatic increase in mortgage interest rates, which makes cash purchases more attractive for those who can afford them.
Development of house prices
The U.S. housing market is suffering a supply shortage, which has contributed to a substantial increase in house prices. Over the past five years, construction costs risen notably, pushing the price of newly built homes up. Meanwhile, income growth has failed to keep up, resulting in worsening housing affordability. According to the house price to income index, home prices outgrew income by over 26 percent between 2015 and 2024.
Is the U.S. housing stock growing?
There were approximately 148 million housing units in the U.S. in 2025, indicating an increase of less than one percent over the previous year. Apart from new-single family housing, the number of newly built multifamily units has also risen notably. Multifamily allows construction in denser urban areas with overheated housing markets, earning it increasing popularity among investors.Â