August 2025 Housing Market Update: Rates Fall, Price Corrections Spread

Podcast: BiggerPockets Real Estate Podcast
Host: Dave Meyer
Release Date: August 15, 2025

Introduction and Overview

In the August 2025 episode of the BiggerPockets Real Estate Podcast, host Dave Meyer delves into the dynamic shifts occurring in the housing market. With mortgage rates hitting their lowest point of the year and widespread price corrections, Meyer provides investors with a comprehensive analysis of current trends, potential opportunities, and the inherent uncertainties in today's real estate landscape.

Mortgage Rates Drop to 6.6%

[00:00] Dave Meyer: "Mortgage rates have dropped to their lowest level of 2025."

• Current Status:
  As of the recording, the prime rate for a 30-year fixed mortgage stands at approximately 6.6%, a significant decrease from the 7.1-7.2% rates observed in January 2025.

• Implications for Borrowers:
  This reduction translates to hundreds of dollars in monthly savings for the average mortgage holder. Meyer emphasizes, "While it could be the start of a trend, I personally wouldn't plan on that and I still do think that could happen."

• Factors Influencing the Drop:
  The decline is attributed primarily to recent labor market data indicating weaker job growth than anticipated. Additionally, downward revisions in job numbers for May and June have heightened recession fears, prompting bond investors to seek safer investments like U.S. Treasuries, which in turn push down mortgage rates.

• Market Predictions:
  Despite the current decline, Meyer warns that mortgage rates may remain in the mid to upper sixes for the rest of 2025. He cautions investors against the "date the rate, marry the house" mentality, advising instead to purchase properties that are viable with existing rates.

• Notable Quote:

  "If your deal does not work with the mortgage rate that you are going to buy it with, do not buy that deal. It is not worth it."
  [04:30]

Inventory Surge and Price Corrections

[09:15] Dave Meyer: "We are entering a buyer's market. A lot of markets across the country are now in corrections."

• Inventory Trends:
  Active listings have surged by 9% year-over-year, nearing pre-pandemic levels. This increase is particularly pronounced in markets experiencing price declines and slower growth rates.

• Price Dynamics:
  Currently, national housing prices are up by approximately 2%, aligning with the pace of inflation. However, this marks a slowdown from previous growth rates, indicating a potential shift towards a more balanced market.

• Supply and Demand Relationship:
  Meyer explains that increased inventory typically leads to downward pressure on prices as sellers compete to attract buyers. Conversely, in markets with lower inventory, prices tend to rise due to higher demand relative to supply.

• Regional Insights:

  • Fastest Growing Prices:
    • Cleveland: 15%
    • Montgomery County, PA: 9%
    • Nassau County, NY: 9%
    • Detroit and Indianapolis: 7% each
  • New Listings Growth:
    • Seattle, Philadelphia, Montgomery County, Cleveland, Minneapolis

  In contrast, regions like Oakland, CA, and West Palm Beach are witnessing declines in both prices and new listings, suggesting cautious seller behavior in these markets.

• Notable Quote:

  "The fact that new listings is starting to decline at the time you would expect them to start to decline indicates to me it's at least one data point to me that shows that this is probably more of a normal market cycle than a crash."
  [18:45]

Delinquencies and Foreclosures: Stability Amidst Change

[22:10] Dave Meyer: "When you look at the credit score of the average borrower in the United States, it has been really high."

• Credit Quality:
  The average credit score for borrowers remains robust, with the 50th percentile score above 750 for the past 15 years, recently inching closer to 770. This high credit quality reduces the risk of widespread mortgage defaults.

• Delinquency Rates:

  • Pre-Pandemic: Stable at around 1%
  • Pandemic Era: Dropped to approximately 0.5% due to foreclosure moratoriums
  • Post-Moratorium: Returned to stable levels around 1%

• Foreclosure Data:
  Recent reports from sources like Adam Data and ICE Mortgage Monitor indicate that delinquencies and foreclosures have stabilized at pre-pandemic levels. Meyer highlights that unless faced with significant economic disruptions, such as massive unemployment spikes, the risk of a foreclosure crisis remains low.

• Delinquency Trends for Other Debts:

  • Credit Card Debt: Increased from 7-8% to 12-13%
  • Auto Debt: Continues to rise
  • Other Debt: On the upswing, though specifics are unclear

• Notable Quote:

  "What we are seeing is that people, generally speaking, are paying their mortgages as expected."
  [33:20]

Investment Opportunities and Risks

[40:50] Dave Meyer: "There is going to be opportunity and risk. I keep saying this, but I think that's the real sort of mindset that everyone needs to get into when we enter a buyer's market."

• Market Correction vs. Crash:
  While acknowledging that national housing prices are set to decline further, Meyer contends that the current trends suggest a market correction rather than a catastrophic crash. The stabilization of new listings and strong borrower credit profiles support this view.

• Investor Strategy:

  • Risk Management:
    Focus on purchasing properties below current comparables, selecting assets in solid neighborhoods that are likely to retain or increase in value during market recoveries.

  • Opportunity Seization:
    Lower housing prices present opportunities to acquire high-quality assets at more affordable rates. Identifying properties poised for growth in the next expansion phase is crucial.

• Long-Term Outlook:
  Meyer remains optimistic about the market's ability to recover, emphasizing the importance of disciplined investing and vigilance in identifying lucrative opportunities amidst the prevailing risks.

• Notable Quote:

  "Housing prices are going to be lower and that means you're going to be able to buy great assets at lower prices than you've been able to in years."
  [45:15]

Conclusion

Dave Meyer's August 2025 housing market update paints a nuanced picture of the current real estate environment. While mortgage rates have seen a welcome decline, price corrections are widespread, signaling both challenges and opportunities for investors. High borrower credit quality and stabilized foreclosure rates mitigate fears of an imminent market crash, supporting the view of a cyclical market correction. Investors are encouraged to navigate this landscape with a balanced approach, capitalizing on lower prices while carefully managing associated risks.

Disclaimer: The insights provided in this summary are based on the podcast transcript and are intended for informational purposes only. Investors should conduct their own research and consult with qualified advisors before making investment decisions.