Has the Real Estate Market Finally Hit the Pause Button?

After five years of fast-paced, post-pandemic growth, the Rhode Island housing market is starting to level off. For the first time in a long time, we’re seeing a hint of breathing room for buyers and an adjustment in expectations for sellers.

A Shift in Home Values

We’ve all been watching the market race ahead since 2020, but the pace is finally slowing. After years of rapid appreciation:

• Home values in Rhode Island rose just 2% from July 2024 to July 2025.

• By contrast, values jumped 15.7% in July 2021 and 7.3% in 2023.

This slower pace doesn’t mean prices are dropping—but it does signal a shift. Buyers now have more breathing room, and sellers are adjusting expectations.

Inventory is Easing the Pressure

One major reason for the shift? More homes are hitting the market. According to Chris Whitten, president of the Rhode Island Association of Realtors:

“We typically measure the housing market by the number of months it would take for the total supply of homes on the market to be sold at the current rate of sales. In July, Rhode Island had a 2.7-month supply compared to the 1.5-month supply seen at the beginning of the year. Don’t be fooled, we are still in a seller’s market with home sellers mostly in the driver’s seat. But for the moment, buyers are enjoying a few more options with a little less competition.”

Even with this shift, inventory is still below the six-month benchmark for a truly balanced market. Still, 2.7 months is a notable improvement over early 2024 and a welcome sign for buyers who’ve been facing limited choices.

A Calmer Mortgage Climate

The mortgage market has also cooled—at least in terms of volatility. Matthew Fenster, Branch Manager of Waterstone Mortgage, shared the following insights:

“It’s been a much calmer stretch in the mortgage world compared to the ups and downs of the past few years. Over the last month, rates have held steady, and the overall trend is still pointing down. Mortgage rates aren’t set directly by the Fed—they move with the bond market, especially the 10-year Treasury and mortgage-backed securities. I’m cautiously optimistic that in the next 3–6 months we could see 30-year fixed rates back in the fives, which would mean about another half-point drop from today. While many expect Fed cuts in September, those moves are already priced into the market—what really matters for mortgage rates is how much the Fed cuts, not just if they do. Overall, it’s encouraging news for buyers and homeowners keeping an eye on opportunities.”

For Buyers: Opportunity and Relief

With more homes on the market and fewer bidding wars, buyers are gaining some leverage.

Key shifts buyers are noticing:

• More inventory means more options

• Offers are often at or below asking price

• Contingencies like home-sale clauses are coming back

• First-time buyers are seeing less competition and stress

If you’ve been waiting for a more manageable market, this could be your time.

For Sellers: Strategy Over Speculation

Sellers still hold an advantage, but they need to be more strategic.

Here’s what sellers should prepare for:

• Longer days on market (DOM) than during peak pandemic years

• Increased likelihood of price reductions

• A greater emphasis on staging, pricing, and curb appeal

• The need to be flexible on terms or closing dates

Testing the market with an inflated price is proving risky. Condition, location, and realistic pricing are more important than ever.

Katy’s Takeaway

The Rhode Island housing market is entering a new phase—one marked by greater balance and predictability.

PRO TIP:

For buyers, this market shift means more options and a less stressful path to homeownership.

For sellers, it’s a reminder to price wisely and prepare thoroughly.

Whether you’re buying, selling, or just staying informed, this shift is a healthy sign for the long-term sustainability of the market.

With market dynamics shifting quickly, navigating today’s real estate landscape can feel overwhelming. That’s why working with a knowledgeable local agent matters more than ever. Whether you’re buying your first home, making a move, or preparing to sell, Homes By Connect can help you:

• Understand what’s really happening in the local market

• Strategically price and prepare your home for a successful sale

• Explore financing and timing options that align with your goals

Let’s talk about your next move and how to make it a smart one. Contact us today for expert advice and personalized support.

Katy Donovan is the Broker/Owner of Homes By Connect and The Donovan Group in Portsmouth, Rhode Island.

Data Points provided by the Rhode Island Association of Realtors®.