• Calm Agent
  • Posts
  • 3 Housing Market Projections for 2025

3 Housing Market Projections for 2025

Are you ready?

Author

Maaret Forst
November 20, 2024

2025 Housing Market Projections: A Year of Optimism and Opportunity

The housing market is set for a year of growth and balance in 2025. Lawrence Yun, the Chief Economist at the National Association of Realtors (NAR), has released a set of optimistic projections that signal a brighter year for buyers, sellers, and real estate professionals. Here are the top three predictions:

1. Home Sales Rebound

  • Existing home sales are expected to rise by 9%.

  • New home sales could grow by 11%.

  • This recovery follows one of the slowest years for sales in decades.

  • More transactions mean increased opportunities for buyers and sellers.

2. Mortgage Rates Stabilize

  • Mortgage rates are predicted to hover between 5.5% and 6.5%.

  • A more stable rate environment boosts buyer confidence.

  • Expect improved affordability compared to recent years of high volatility.

3. Moderate Price Growth

  • Median home prices will likely increase by 2%.

  • Prices are expected to reach approximately $410,700.

  • Slower growth creates a balanced market with less competition.

Opportunities for Buyers and Sellers

Buyers: Lower volatility in rates and moderate price growth make 2025 a good time to enter the market.

Sellers: More sales activity means increased chances to find motivated buyers, though competitive pricing will be essential.

More Insights

After years of slow activity, existing home sales are projected to rise by 9% year-over-year. This uptick reflects the pent-up demand from buyers who have been holding off due to high interest rates and limited inventory. Similarly, new home sales are expected to increase by 11%, driven by a surge in new construction and continued demand for housing.

This rebound in sales is particularly significant as it follows one of the slowest years for existing home transactions since 1995. For real estate professionals, this means more opportunities to connect with clients and facilitate transactions.

Mortgage rates, a critical factor influencing buyer behavior, are forecasted to stabilize around 6%, with fluctuations between 5.5% and 6.5%. While these rates are higher than the historically low levels seen in the early 2020s, they represent a manageable range for most buyers. This stability is expected to boost consumer confidence, making 2025 a favorable time to enter the housing market.

The rapid price increases of recent years are expected to taper off. Median home prices are predicted to grow by 2%, reaching approximately $410,700. This slower rate of appreciation aligns with historical norms and creates a more balanced market.

A Balanced Market on the Horizon

2025 promises to be a year of recovery and balance for the housing market. With stable mortgage rates, increasing sales, and moderate price growth, the market is poised to offer opportunities for all participants.

For real estate professionals, the focus will be on staying informed, leveraging technology, and guiding clients through this evolving landscape. By aligning with these trends, you can position yourself as a trusted advisor in a promising market.