As we approach 2025, understanding expert predictions for the housing market is crucial. If you plan to buy or sell a home next year, grasping these forecasts will help you make informed decisions.
Here’s a look at the latest predictions for mortgage rates, home sales, and prices in 2025:
Mortgage Rates Expected to Decline Slightly
Mortgage rates have a significant impact on the housing market. According to forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo, mortgage rates are expected to gradually decline next year.
The expected drop in mortgage rates is attributed to continued easing of inflation and a slight increase in unemployment, which are signs of a strong but slowing economy. Many experts believe these signals will lead the Federal Reserve to cut the federal funds rate, likely resulting in lower mortgage rates.
More Home Sales Expected
The market anticipates an increase in housing supply and a rise in both buyers and sellers moving away from their wait-and-see positions due to rising rates. This is a key reason experts expect home sales to increase next year. According to Fannie Mae, MBA, and NAR, approximately 5.4 million homes are expected to be sold in 2025, a slight increase from the lower sales figures of 2023 and 2024.
In 2023, about 4.8 million homes were sold, and about 4.5 million are expected to be sold this year. While a significant influx of buyers and sellers into the market is not expected, more movement is anticipated in highly sought-after areas, leading to increased competition among buyers for available homes.
Home Prices to Rise Gradually
As more buyers enter the market, upward pressure on prices will continue. The latest price predictions from ten reliable real estate sources suggest:
Experts predict that, on average, national home prices will rise by about 2.6% next year. This is a broad forecast, and the actual increase will vary significantly by region. Experts agree that home prices across the U.S. will rise gradually and at a slower, more normal pace next year. However, it’s important to remember that price changes will vary by local market.
Conclusion
Understanding the 2025 housing market outlook can aid in your planning. Being aware of these trends before buying or selling will help you make the best decisions. It’s recommended to consult a trusted real estate agent to discuss how these forecasts might impact your plans.
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