Winter 2024 (2) - Flipbook - Page 20
HOMESTEAD
ROAD
Real Estate
News
REAL ESTATE MARKET
PREDICTIONS
As the new year approaches, real estate experts are
making bold predictions about the U.S. housing market in
2025. From rising home prices to shifting buyer
demographics, here’s what industry professionals expect in
the year ahead—and how it could impact buyers, sellers,
and renters.
Prediction 1: Home Prices Will Rise 4%
Expect U.S. home prices to increase by 4% in 2025, driven
by continued demand and limited inventory. While
construction is expected to ramp up, it won’t be enough to
match buyer interest. With homeownership remaining out
of reach for many due to rising prices, renting will become
the more feasible option for a growing number of
Americans.
Prediction 2: Mortgage Rates Will Stay Near 7%
Mortgage rates are projected to hover around 6.8%
throughout 2025. Factors like inflation concerns and
potential federal policy changes will keep rates high.
However, if economic conditions soften or proposed tax
cuts and tariffs are scaled back, rates could dip into the
low 6% range. Either way, affordability challenges will
persist.
Prediction 3: More Home Sales Despite High Costs
Despite high prices and mortgage rates, home sales are
expected to rise by 2% to 9%, reaching an annualized rate
of 4.1 to 4.4 million units. This surge will be fueled by
pent-up demand from buyers waiting out market
uncertainty. If rates fall unexpectedly, sales could
increase even further.
Prediction 4: Lower Real Estate Commissions
Real estate commissions are expected to decline slightly,
especially for luxury properties. The National Association
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