2025 Housing Market Forecast: What Buyers and Sellers Need to Know
Introduction
The housing market is poised for another shift in 2025, with factors like mortgage rates, inventory, and affordability playing a significant role in shaping real estate trends. In this episode, Jeb Smith and Josh Lewis break down what to expect in the coming year with their 2025 housing market forecast .
Key Takeaways
- Interest rates projected to stabilize but remain higher than pre-pandemic levels.
- Modest home price growth with regional variations.
- Inventory challenges due to homeowners holding onto low-interest mortgages.
- The economy's performance will heavily influence the market.
Interest Rates in 2025
The Fed has already implemented 100 basis points of cuts, with expectations for further reductions if inflation continues to ease. Mortgage rates are projected to average around 6.34% by the end of 2025.
Home Prices
Experts predict a modest increase in home prices, avoiding dramatic fluctuations. Goldman Sachs forecasts a 4.4% rise, while Moody’s Analytics expects a 0.3% gain.
Inventory Challenges
Homeowners locked into low mortgage rates are reluctant to sell, limiting available inventory. New construction is helping but not enough to meet demand.
Regional Market Trends
- Sun Belt states may see continued growth.
- High-cost coastal cities could experience stagnation.
- Midwest regions may remain stable.
Should You Buy or Sell in 2025?
For Buyers
- Act early if rates decline.
- Get pre-approved to lock in lower interest rates.
For Sellers
- Price competitively in slower markets.
- Highlight key property features.
Conclusion
The 2025 housing market is shaping up to be more predictable than the past few years. While affordability remains a concern, stable interest rates and moderate home price growth suggest a more balanced market.
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