For the first time in nine years, Realtor.com projects that the housing market in 2025 will be "balanced," as inventory and demand should be in line with each other.
Realtor.com projects single-family home inventory to grow by 13.8% and existing for-sale home inventory to increase by 11.7%.
President-elect Donald Trump has vowed major changes to regulations in his second term. Realtor.com notes that Trump's proposals to address the housing shortage include making more federal land available for homebuilding, which could help bolster supply.
"While President-elect Trump can work quickly with his administration to implement some regulatory changes, other policies that will affect housing, such as tax changes and broad deregulation, require the cooperation of other branches and levels of government," said Danielle Hale, chief economist for Realtor.com. "The size and direction of a Trump bump will depend on what campaign proposals ultimately become policy and when. For now, we expect a gradual improvement in housing market dynamics powered by broader economic factors. The new administration's policies have the potential to enhance or hamper the housing recovery, and the details will matter."
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Other highlights from Wednesday's report include:
Slight decline in mortgage rates. Thirty-year fixed mortgages currently average 6.8%. Realtor.com projects that the average mortgage rate will fall to about 6.3% in 2025, and could reach 6.2% by the end of the year.
Home sale prices to increase. Homes will sell for 3.7% more in 2025 than in 2024, Realtor.com projects. In 2024, home prices increased by 4%, and in 2023, they went up 1.1%.
Realtor.com previously said over the last 22 years, home sale prices have increased on average 4.2% annually at the national level. 2025 should mark the third consecutive year of below-average increases to home prices. Prices rose by 35% in the 30-month period starting from early 2020 through mid-2022, Realtor.com reported.
Higher inventory should mean it's not really a buyers' or sellers' market. Realtor.com expects 2025 to have the highest for-sale inventory since December 2019 and nearly 20% of listings having price cuts. Realtor.com says mortgage rates will relax some, but not enough to call it a "buyers' market."
Housing market depends on where you live. If you're looking to move into the Phoenix region, expect to spend 13.2% more for a home in 2025 than in 2024. If you're buying a home in Albuquerque, expect to actually pay less in 2025.
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