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The US housing market is expected to enter 2025 facing the same headwinds as this year. Mortgage rates are expected to remain volatile and home prices to continue their upward trajectory, albeit at slower pace than during the pandemic boom years.
The latest data shows the market is in limbo, with the median single-family home price reaching $437,300 in October, up from $426,800 in September, according to U.S. Census data. Meanwhile, the rental market is showing signs of cooling, with average rents hovering at $1,619 in October — virtually unchanged from a year earlier, according to Redfin.
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“If the housing market was going to crash, it would have crashed by now,” Daryl Fairweather, chief economist at Redfin, told CNBC. “The housing market is as resistant to interest rates going as high as they are.”
Economists project home prices to rise about 4% in 2025, marking a return to pre-pandemic growth rates. However, CoreLogic economist Selma Hepp told CNBC that inflation may remain unchanged during the spring buying season.
The rental landscape looks set for a shift. A surge in new apartment construction is expected to keep national rent growth steady in 2025, potentially strengthening tenants’ negotiating position.
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Some property managers offer discounts such as free parking or waived fees to attract tenants.
Mortgage rates are likely to remain a wild card. While Redfin forecasts an average of 6.8% in 2025, the trajectory could change based on economic policy and inflationary trends. Jessica Lautz, deputy chief economist at the National Association of Realtors, expects rates to settle in the 6% range in 2025.
Home sales may finally be picking up after years of restraint. According to the CNBC report, Redfin projects that roughly four million homes will change hands in 2025, an increase of 2% to 9% from 2024. “People have waited long enough,” Fairweather said, pointing to pent-up demand from buyers and sellers that has slowed moves.
2024-12-29 20:00:40
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