The third quarter of 2025 is in the books, meaning we’re in the final stretch before year’s end. The past few months brought a mixed picture across markets — for your convenience, we’ve written a wrap-up of some key developments, headlines, and trends from Q3 of 2025. If you missed it, feel free to look back on our Q2 and Q1 reports, as well as our 2025 outlook.
Investors made up the highest share of homebuyers
CNBC reported that both individual and institutional real estate investors made up the highest share of homebuyers in the third quarter of 2025. It’s a 27% increase from the first quarter, the highest percentage in the last five years. While the share of sales is higher, the actual numbers are slightly lower due to home sales being weaker compared to 2024. Overall, investors own about 20% of the 86 million single-family homes in the country.
Mortgage rates dropped to three-year lows
In response to signs of a weakening labor market, the Federal Reserve lowered the federal funds rate to a range of 4.0% to 4.25% in September. This led to a three-year low drop in mortgage rates, with the average 30-year fixed rate dipping to 6.26% in mid-September, according to Fed data. Rates slightly rose again due to factors such as high inflation and rising Treasury yields, but remain in the low-6% range as of early October 2025.
Median home prices hit new highs
Despite Fed cuts and record-low mortgage rates, the nation hit a new record high in median home price at $375,000 in the third quarter of 2025. According to analysis from ATTOM, 44.7% of 580 counties included in the report experienced worse affordability index rates in the third quarter than in the second, and home prices are outpacing wages in 49.8% percent of counties. Kankakee County in Illinois was among the top 10 counties with the largest annual increase in median home price, with a year-over-year increase of 24.6%.
Foreclosure activity increases annually
ATTOM’s Q3 2025 U.S. Foreclosure Market Report found a total of 101,513 U.S. properties with foreclosure filings during the third quarter of 2025. That’s less than 1% more than the previous quarter, but a 17% increase when compared to activity from a year earlier. “In 2025, we’ve seen a consistent pattern of foreclosure activity trending higher, with both starts and completions posting year-over-year increases for consecutive quarters,” said Rob Barber, CEO at ATTOM, as reported by ATTOMdata.com. “While these figures remain within a historically reasonable range, the persistence of this trend could be an early indicator of emerging borrower strain in some areas.”
Compass proposes $1.6 billion merger deal with Anywhere
The two largest U.S. residential real estate brokers, Compass and Anywhere, are set to merge pending approval from shareholders and regulators. While the merger isn’t set to take place until the second half of 2026, the move is part of a recent trend wherein larger firms have gained market share through mergers and acquisitions. NPR reports that some experts, including real estate market analyst Jack McCabe, CEO of McCabe Research and Consulting, express concerns that waves of consolidation make it harder for independent firms to stay competitive.
Consumers value convenience and speed
According to the same report from NPR, consumer interests continue to trend towards transactions that are quick and convenient. “That’s why Rocket Mortgage became the largest U.S. lender — even though it charged slightly higher rates,” said Tomasz Piskorski, a real estate professor at Columbia Business School, as reported by NPR. “[P]eople were willing to pay for a seamless digital experience.”
Seize today’s real estate opportunities without sacrificing good service
At Landtrust Title, we partner with you to provide the best possible experience — but taking advantage of today’s real estate market means you need both industry-leading tech and responsive, knowledgeable experts who help you navigate the market and deliver excellent service in every transaction.
In a complicated market, it’s more important than ever to have real estate professionals you can trust on your team. For title experts you can count on, contact Landtrust Title today — your Partner for Results.