Current Predictions for the 2025 Housing Market

The real estate market remains a subject of scrutiny. It’s right to be curious about what the next year will bring. Here’s some predictions.

?

Sales

Existing and new home sales are expected to improve following a recessionary period that the housing market underwent earlier than the overall economy. Starts of single-family dwelling permits are increasing nationwide, with some states experiencing faster increase than others. According to NAR, the number of housing starts will rise by 1.2% to 1.43 million in 2024 and 4.9% to 1.5 million in 2025. In the end, NAR predicts that sales of existing homes would increase by 9% to 4.46 million in 2024 and by an additional 13.2% to 5.05 million in 2025.

?

Rates

Lower mortgage interest rates in the upcoming months will support an increase in existing house sales as inflation is predicted to decline. The Fannie Mae house Purchase Sentiment Index is becoming better, and 30-year mortgage rates have probably peaked, according to the National Association of Realtors (NAR), which predicts an uptick in existing house sales. Flattening rent prices, according to experts, will contribute to a decline in the Consumer Price Index (CPI), which could free up money for the Federal Reserve to lower interest rates. The CPI fell from its 2022 peak of around 9 percent to 3.1 percent in January.

?

Job Growth

This year's job growth, which has been encouraging thus far, will fuel long-term demand for real estate. Better workers’ pay usually results from a robust job market, which raises the demand for homes. In March, the Bureau of Labor Statistics (BLS) released a positive report: companies created 303,000 new jobs, exceeding the 231,000 monthly average growth over the previous 12 months. Additionally, according to BLS data, there are 5 million more payroll employment overall than there were at pre-COVID-19 highs. According to a ZipRecruiter survey, many employees who took on new positions this year want to make significant lifestyle adjustments, such as purchasing a new home or vehicle.

?

Prices

Price reductions are not always the result of slower price rises. Rather, it proposes a more equilibrium market in which supply, and demand can reach a compromise. This could help purchasers who are having trouble affording the present hot market.

?

Call Lesa Miller at (812) 360-3863 or go online at https://lesamillerrealestate.com/ where you can read her posts on other social media accounts and websites.