The U.S. condominium market is showing signs of structural strain in 2025, weighed down by shifting generational preferences, growing inventories, and regional overconcentration. While millennials continue to lead in mortgage applications across the housing sector, older generations are the backbone of condo demand — offering both resilience and risk in a cooling sales environment, says real estate data company Cotality.
Across the country, condos are taking longer to sell, supply has risen sharply, and price appreciation is slowing or even reversing in key urban markets. Yet, despite declining overall activity, the sector has preserved a consistent share of U.S. housing transactions, underpinned by steady demand in places like Florida, Hawaii, and Washington, D.C.
Demographic Divide Fuels Market Fragmentation
In the first half of 2025, millennials made up 45% of condo mortgage applications, largely due to their demographic dominance. But the most enthusiastic condo buyers remain older Americans. Applications reveal that 14% of Silent Generation and 11% of Baby Boomer borrowers opted for condos, compared with fewer than 10% among Gen X, millennials, and Gen Z.
Repeat buyers–typically older homeowners or downsizers–now account for half of all condo mortgage activity. Investor presence remains strong too, though largely invisible in lending data due to widespread cash purchases. Cotality estimates investors make up 19% of condo mortgage applications, but that figure underrepresents the true market share.
National occupancy data reveals a structural imbalance: just 60% of condos are owner-occupied, compared to 85% of single-family detached homes, underscoring the investor-driven nature of the condo segment.
Inventory Swells While Sales Slow
Condo inventory has climbed rapidly since mid-2022, rising nearly 80% by mid-2024 and continuing to build through 2025, albeit more slowly. Meanwhile, condos are lingering longer on the market. The average time to contract signing has tripled from under 30 days in 2022 to 90 days today.
By contrast, non-condo homes are selling 30 days faster and have seen slight inventory declines, revealing a growing divergence in market velocity.
Despite slowing sales, condos continue to represent roughly 10% of total home transactions–down modestly from the 12% peak in 2005. But market share varies widely by region: condos account for over 55% of sales in Hawaii, dominate Washington, D.C.’s housing landscape, and comprise 16% of sales in Florida, which alone represents 18% of all U.S. condo sales.
In Florida, that prominence is now facing headwinds. Insurance premiums are rising, safety regulations on aging buildings have tightened post-Surfside, and migration patterns–both domestic and international–have weakened. Nearly every major Florida metro has seen condo sales volume slip since 2021.
New Construction and Urban Concentration
New condo sales dropped 8% year-over-year, with 42,000 units sold between June 2024 and May 2025, according to Cotality. Activity remains concentrated in just a handful of large metros. New York led the market with 7,400 sales, followed by Detroit (2,300). Only six other U.S. metros surpassed 1,000 new condo sales, including Austin, Los Angeles, San Diego, Riverside, and Washington, D.C.
In contrast to the broader single-family housing market–now more dispersed across southern and Sun Belt states–the condo sector remains anchored in urban strongholds, with less geographical diversification.
Condo Lending Slips as Prices Soften
Financing trends reflect growing caution. Condo purchase originations fell 2% year-over-year, with volume declining from a $148 billion high in 2021 to just $83 billion in 2024. While the single-family market has recently seen a modest rebound, with 6% growth in 2024, condos have lagged.
Cotality data shows the condo mortgage market is heavily tilted toward conventional financing, with 86% of loans backed by Fannie Mae or Freddie Mac–versus 70% for single-family homes. The sector relies far less on FHA and VA loans, suggesting stricter underwriting and potentially higher borrower creditworthiness.
That conservatism is reflected in performance. As of May 2025, condo loans are outperforming detached home mortgages. Delinquency rates sit at 1.5% for condos, well below the 2.8% seen in detached properties. Foreclosures are rare in both segments but remain slightly lower for condos at 0.2%.
Regional Price Weakness Emerges
After several years of price gains, condo prices are now weakening in several major markets. April data shows annual price drops of 1.9% in Miami, 1.2% in Los Angeles, and 0.6% in Washington, D.C.. Only a few metros, including Boston and Chicago, continue to see notable price growth.
While these numbers don’t yet point to a widespread downturn, they signal a reversal from last year’s upward trend and a loss of pricing power in previously hot markets.
Bottom Line
The U.S. condo market in 2025 is navigating a delicate balancing act. With baby boomers and cash-rich investors propping up demand, the sector continues to play a meaningful — if narrowing — role in the housing ecosystem. But rising inventory, falling absorption rates, and growing regional risk exposure suggest that without reinvention or regulatory relief, the condo market’s best days may be behind it.
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