2025 Luxury Market Mid-Year Review

Strength, Strategy & Shifting Dynamics

As we mark the midpoint of 2025, North America’s luxury real estate market continues to reflect a story not of slowdown, but of recalibration. Despite broader economic uncertainty and lingering questions around interest rates, the high-end property sector has shown disciplined resilience - with steady pricing, increased inventory, and strategic decision-making becoming the new norms.

We review the last six months to understand current trends and possible future expectations:

A Strong Start to the Year

2025 kicked off with strong momentum. In January, luxury single-family home sales climbed 17.6% year-over-year, with attached homes up 12.7%. Sellers returned in force, driving a 33% increase in new single-family listings and boosting market confidence.

February sustained high inventory levels, up 24%, but momentum cooled. Sales cooled as buyers responded to interest rate concerns and broader economic signals. However, March brought a rebound. Single-family sales rose 7.3% year-over-year and nearly 40% from February. Attached inventory also surged, adding choice and depth to the market.

Q2: A Market in Recalibration

By April and May, the pace shifted again. Single-family sales dropped slightly, down 2.9% in May year-over-year, while attached home sales fell more sharply, by 11.9%, as buyers hesitated once more due to economic uncertainty.

Single-family inventory levels rose over 30% from last year and attached homes rose 23.5%, but new listings increased by only 4%, indicating that many potential sellers were also holding off, waiting for improved economic signals or interest rate adjustments.

June: Balanced, Deliberate, and Data-Driven

June brought clarity to the evolving mood. Sales of single-family luxury homes rose 11% year-over-year, showing that demand is still present, particularly for move-in-ready homes in lifestyle-rich destinations. Attached home sales remained mostly flat, rising just 0.6%. Inventory continued to exceed 2024 levels, but new listing growth slowed, pointing to lingering hesitation among sellers.

Prices have held steady, and in some cases, climbed. The median sold price for single-family luxury homes rose 1.6% in June, while attached homes gained a robust 6.4%. This strength is tied to quality - buyers are willing to pay for properties that offer design, condition, and location advantages. Homes lacking these features are seeing longer time on market and greater pressure on their list price.

Indeed, time on market in June rose by 23% compared to last year. But this is not a sign of weakness, it’s a sign of a more mature, selective luxury buyer who is focused on aligning real estate decisions with broader financial goals.

Looking Ahead: The Second Half of 2025

• Interest rates will be the defining factor for the rest of the year. A meaningful rate cut could trigger a wave of listings and reinvigorate buyer confidence, especially for the aspiration wealthy.

• Regardless of rate changes, today's luxury buyer is not rushing, instead they are searching for properties that reflect evolving preferences: wellness features, seamless indoor-outdoor living, and flexibility.

• Second-home and low-tax markets will continue to thrive, though Gen X and millennial buyers are showing renewed interest in select urban cores.

• At the same time, there’s growing demand for homes with renovation potential, driven by high equity levels, aging inventory, and a desire to personalize.

• Expect time on market to remain elevated, especially if supply outpaces buyer urgency.

• Pricing is expected to remain firm and buyer intent strong, so well-prepared sellers and strategic buyers still have opportunity to succeed.

• The luxury market in 2025 is not slowing - it’s shifting. With all eyes continuing to mindfully watch the macroeconomic levers like interest rates and global financial trends.

For those considering a move – whether that is buying, selling, or investing - this is a moment that rewards preparation, timing, and data-driven insight. The next chapter of 2025 will not be about chasing the market. It will be about moving strategically when the conditions align.

Click here to see the Institute’s full report. 

Ready to Sell or Buy Your Luxury Home?

Now more than ever, working with a trusted luxury real estate agent is essential. A seasoned advisor can help you navigate this multifaceted market, set realistic expectations, and make informed decisions that align with your goals. Click here to find a qualified luxury real estate professional in your area.