Industry sources weigh in on possible answers.
Market Perspective: What will shape the 2025 housing market?
 
Home sales lagged in 2024 amid elevated rates, high prices, and low inventory. Will 2025 bring more of the same, or are changes on the horizon? See what industry experts are forecasting for the new year.
 
#1 Mortgage Rates
30-year fixed mortgages rates varied widely in 2024, from a low of 6.08% to a high of 7.22%.[1]
Average 30-Year Fixed Mortgage Rates in 2024[1] - Table
Projected Mortgage Rates by end of 2025: Range from 6.0% NAR[2] to as high as 7.25% HousingWire[6]
The Fed's decision to dial back future rate cuts7 may keep mortgage rates elevated in the near-term.
#2 Home Prices
Expect prices to continue rising, but at a similar or slightly slower pace.[6]
2025 Home Price Appreciation Forecasts[6] - Table
#3 Inventory
Housing inventory is currently estimated at 3.7 million units below demand, but that may improve this year.[8]
Projections: New construction (total housing starts) - 1.45 million units (NAR, MBA)[2], [9]. Single-family housing starts - 1.1 million (NAR, MBA, Realtor.com)[2], [9], [3]. Existing-home inventory - Annual increase of 11.7% (Realtor.com)[3] to 13% (HousingWire)[6]
#4 Home Sales
Existing-home sales are expected to rise modestly from 2024, but they're unlikely to return to 'normal' levels.*
Estimated Existing-Home Sales Projects: 4.5M MBA[9], 4.07M Realtor.com[3], 4.16M Zillow[10] *Home sales have averaged 5.15 million a year over the last 20 years.[6]
What are your thoughts about the 2025 housing market? Let’s talk about what we see on the horizon.
 
*The statistics listed herein are not facts but predictions made by the third-party sources listed below. These figures do not necessarily represent the opinions of %%MR_LoanOfficerBranchName%% or its Loan Officers.

Sources:
  1. Freddie Mac Primary Mortgage Market Survey.
  2. National Association of Realtors® (NAR), “Housing Hot Spots for 2025: Top Markets Amid Stabilizing Rates.”
  3. Realtor.com® 2025 Housing Forecast.
  4. Fannie Mae, “Expert Panel Upwardly Revises Home Price Growth Outlook, Still Expects Deceleration in 2025 and 2026,” December 5, 2024.
  5. Redfin, “Redfin’s 2025 Predictions: Pent-Up Demand Will Lead to More Home Sales, But Many Would-Be Buyers Will Opt to Rent,” December 4, 2024.
  6. HousingWire, “2025 Housing Market Forecast: The Path to Home Sales Recovery.”
  7. Federal Open Market Committee, Transcript of Chair Powell’s Press Conference, December 18, 2024.
  8. Freddie Mac, “Economic, Housing and Mortgage Market Outlook — November 2024 | Spotlight: Housing Supply,” November 24, 2024.
  9. Mortgage Bankers Association (MBA), Mortgage Finance Forecast, November 21, 2024.
  10. Zillow Housing Market Report, November 2024.
  
 

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