U.S. Housing Market Signals Broader Correction—Michael Eisenga, CEO of First American Properties

COLUMBUS, Wis., May 20, 2025 (GLOBE NEWSWIRE) -- As of April 2025, the U.S. housing market is showing clear signs of a shift. According to national data, the total number of active homes for sale reached approximately 959,251—a sharp 30.6% increase compared to April 2024. This increase in inventory comes as pending home sales declined 3.2% year-over-year, underscoring growing signs of price and terms fatigue for homebuyers nationwide.

Michael Eisenga, CEO of First American Properties in Columbus, Wisconsin, shared his perspective on the evolving market conditions:

“The U.S. housing market is no longer in the high-flying territory we’ve seen over the past few years. What we’re seeing now, particularly with rising inventory and declining pending sales are the early signs of a correction already playing out in several markets.”

The affordability gap continues to widen. Today, a household must earn over $45,000 more annually than in 2019 to afford the median-priced home, driven by both rising prices and elevated interest rates.

Home prices have retreated from their peaks in 47 of the top U.S. housing markets, with markets like San Francisco, CA and Austin, TX leading the way, with each seeing a nearly 10% decline. The Southeast, once a high-growth region, has now joined the correction phase with many cities reporting an approximate 10% drop in the Residential Housing Price Index (RHPI) from peak levels.

“A regional correction is clearly underway in parts of the country,” Eisenga continued. “The Southeast in particular is showing textbook signs of price contraction. Historically, these regional declines have been precursors to broader national corrections.”

The once wide price gap between new and existing homes has narrowed significantly from $64,000 in Q4 2022 to just $14,600 in Q1 2025. When factoring in rate buydowns, closing cost credits, and other buyer incentives offered by builders that are not apparent in the purchase price recorded, the gap may effectively be nonexistent. Traditionally this gap has averaged around 15%.

Notably, new home prices have declined for eight consecutive quarters—a trend that has historically preceded nationwide housing corrections. Existing home sellers are the last ones to realize new market realities. Builders need to sell their homes, so they are much more in tune with market fluctuations and react accordingly. Eventually the equilibrium between New and Existing returns and existing home prices fall to the traditional gap range. Buyers will pay a higher price for a new home compared to a used one.

While the Midwest and Northeast have thus far avoided significant price declines, Eisenga cautions against complacency.

“The Midwest is traditionally more stable, but stability doesn’t mean immunity. Since 2019, prices have surged beyond sustainable levels; 35% in Madison, WI, and an extraordinary 160% in Milwaukee for example. These figures raise serious questions about long-term affordability and market balance.”

Eisenga emphasized the importance of watching trends—not just in pricing, but in buyer behavior, affordability metrics, and regional shifts all of which are currently at or near record level bearishness.

“When we examine historical patterns of housing downturns, the trajectory we’re on aligns closely with previous deep national corrections. That’s something buyers, sellers, and investors need to keep in mind as we move further into 2025.”

About First American Properties
First American Properties, based in Columbus, Wisconsin, is a privately held real estate investment and development firm focused on residential and commercial properties throughout the Midwest. Led by CEO Michael Eisenga, the company is committed to market transparency, responsible growth, and data-driven investment decisions.

For media inquiries contact:
meisenga@firstamericanusa.com | 920-350-5754