As 2025 approaches, it’s vitally important that homeowners know the housing market predictions experts are offering about the housing market. Knowing their predictions could help guide decisions regarding purchasing or selling homes next year.
Housing Market Predictions 2025
Here is an early glance at some of the latest projections regarding mortgage rates, home sales, and prices in 2025.
Mortgage Rates Are Projected to Decrease Slightly
Mortgage rates play a vital role in shaping housing markets and our forecasts from Fannie Mae, MBA (the Mortgage Bankers Association), National Association of Realtors (NAR), and Wells Fargo indicate an expected gradual reduction of mortgage rates over this year (see chart below):
With the Federal Reserve expected to cut its benchmark interest rate as early as 2024, mortgage rates could experience a slight reduction.
Housing Market Predictions: Expect More Homes To Sell
Experts predict an uptick in both supply and demand of available properties on the market due to higher interest rates causing buyers and sellers to make moves, thus prompting an uptick in home sales next year. This factor alone has many experts projecting an increase in residential real estate transactions over this timeframe.
Fannie Mae, MBA, and NAR expect total home sales to increase slightly by 2025. An expected total of approximately 5.4 million homes should sell annually (see graph).
That would mark a modest upswing from sales levels seen in 2023 and 2024; to put this into context, around 4.8 million homes sold total in 2023 while expectations are for roughly 4.5 million sales this year.
Though slightly reduced mortgage rates won’t draw an overwhelming flood of buyers and sellers back onto the market, they will undoubtedly move more people. That means more homes available for sale as well as competition among potential purchasers eager to acquire them.
Home Prices Will Rise Moderately
More buyers entering the market will keep prices increasing gradually.
On average, experts predict home prices to increase nationally by 2.6% next year, although individual opinions differ on this figure. Experts do agree, though, that home prices will increase moderately at a more steady rate next year; but prices could differ according to local markets.
Understanding 2025 housing market predictions can assist your planning. Being informed on these trends will allow for optimal decision-making when buying or selling, so reach out to a real estate agent you trust about how these forecasts could influence their plans.
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