According to keepingcurrentmatters.com, as we approach 2025, understanding the housing market's trajectory is crucial whether you're planning to buy or sell. Having insight into expert projections can help you make informed decisions about your homeownership goals.

Here’s a breakdown of the latest forecasts on mortgage rates, home sales, and pricing trends for 2025.

Mortgage Rates Expected To Decrease Slightly

Mortgage rates significantly influence the housing market, and experts predict a gradual decline in 2025. Forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo all suggest that mortgage rates will ease next year.

The anticipated decrease in mortgage rates is linked to a combination of easing inflation and a slight uptick in unemployment, signaling a strong yet decelerating economy. These conditions may prompt the Federal Reserve to lower the Federal Funds Rate, which typically leads to lower mortgage rates. As Morgan Stanley notes:

“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”

Increased Home Sales on the Horizon

As mortgage rates dip, both supply and demand in the housing market are expected to rise. Many potential buyers and sellers who were hesitant due to higher rates may decide to act, leading to an increase in home sales.

According to projections from Fannie Mae, MBA, and NAR, total home sales are expected to reach approximately 5.4 million in 2025, a slight increase compared to the past two years. For context, around 4.8 million homes were sold in 2023, with 2024 expected to see around 4.5 million sales.

While the drop in mortgage rates isn't anticipated to trigger a surge of buyers and sellers, it will likely encourage more market activity, increasing the number of available homes and the competition among buyers.

Moderate Home Price Increases Anticipated

With more buyers entering the market, home prices are expected to experience moderate growth. According to forecasts from ten of the most trusted real estate sources, national home prices are predicted to rise by about 2.6% in 2025. Although experts vary in their predictions, they generally agree that price increases will be more gradual, reflecting a more stable market.

However, it's important to remember that these predictions can vary widely depending on local market conditions.

Bottom Line

Staying informed about 2025 housing market forecasts can help you navigate your next real estate move with confidence. Whether you're buying or selling, understanding these trends will equip you to make the best possible decision. Reach out to Stuecher Manning Group to discuss how these projections may influence your plans.

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Source: keepingcurrentmatters.com