Preparing for 2025: What Homeowners and Buyers Should Expect
Preparing for next year’s housing market will require some savvy. Here’s a rundown on the trends and how you might plan.
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2024 Trends
The first half of 2024 saw a sharp increase in home prices, a tight housing market, and mortgage rates that appeared to be stuck close to 20-year highs. Consequently, there was little interest in purchasing a home. During the summer and early fall, rates did go down significantly, but they have already increased once more. According to Zillow data, the average 30-year mortgage rate in October was 6.24%. Additionally, average property values are rising, rising 2.7% annually to $359,892 in September.
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The Effect On Prices
Since many sellers postponed advertising their properties during the pandemic, either because they were afraid of contracting COVID-19 or because they were reluctant to enter a frenetic market as buyers, short-term trends may have contributed to this. These factors combined to drive an incredible increase in property values. Many people are questioning if they would ever get back down now that they are so high. However, whatever dips we would experience would probably be rather moderate because supply is consistently limited.
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Rates Will Still Fluctuate
Throughout most of 2024, the 30-year mortgage rate hovered around 6.5%, with sporadic dips beyond 7%. Forecasters were certain that rates will drop below 6% in 2025 for much of the year. However, experts have started raising their mortgage rate projections after the election. In 2025, they are concluding that mortgage rates will continue to be higher than 6%.
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Prices Likely Won’t Improve Much
Although there is still a gap between supply and demand for homes, it is not as great as it once was. Accordingly, home values will likely continue to rise in 2025, albeit not much, particularly as long as mortgage rates stay above 6.25%. As buyers get off the sidelines and begin competing against each other for the few available homes, home prices may rise whenever mortgage rates noticeably decline. https://www.resiclubanalytics.com/p/home-prices-headed-according-zillows-latest-forecast
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What Buyers and Sellers Should Do
Preparing for the housing market will require buyers and sellers to remain shrewd. Home sellers should heavily demonstrate the value of their homes by listing updates. Home buyers should be mindful of flaws in the property before focusing on one.
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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.