As 2025 approaches, the housing market is expected to rebound, offering new opportunities for buyers As 2025 approaches, the housing market is expected to rebound, offering new opportunities for buyers after two years of slow sales. Industry experts shared insights during the National Association of REALTORS®’ Real Estate Forecast Summit, highlighting the potential for stronger sales, stable mortgage rates, and increased housing inventory.
A Brighter Horizon for Homebuyers
The 2025 housing forecast predicts a positive shift with home sales climbing back from a 15-year low, moderated but steady price growth, and more homes available—both new builds and existing properties. Stabilizing mortgage rates are also set to play a key role.
“Homebuyers will find it easier to enter the market in 2025,” said Lawrence Yun, NAR’s Chief Economist. “Affordability challenges are easing with more inventory, job growth, and stabilized mortgage rates paving the way to homeownership.” Yun added that if mortgage rates drop to 6% as predicted, an estimated 6.2 million more buyers could afford homes compared to when rates were near 7%.
This optimism is already reflected in increased sales activity this fall as mortgage rates dipped into the mid-to-upper 6% range, down from multi-decade highs.
For those ready to take the next step, Allure Brokerage is here to help navigate the opportunities of this dynamic market. Whether you’re a first-time homebuyer or a seasoned seller, our experienced agents are equipped to guide you every step of the way.
Key Predictions for 2025 and Beyond:
- Existing Home Sales: Expected to rise 7%–12%.
- New Home Sales: Projected growth of 11%.
- Median Home Price: A modest increase of 2% to $410,700.
- Mortgage Rates: Stabilizing near 6%.
- Job Growth: Approximately 2 million new jobs forecast.
More Homes on the Market
Housing inventory has seen significant gains, with listings up 20% year-over-year in October. This trend is expected to continue as more homeowners, encouraged by stabilizing mortgage rates and favorable conditions, list their properties.
Danielle Hale, Chief Economist at Realtor.com®, expressed optimism: “Increasing inventory will benefit both buyers and sellers, creating a more balanced market where transactions flow more smoothly.” The surge in listings is also driven by new home construction, with NAR projecting a return to the historical average of 1.5 million units annually.
Builders are addressing affordability with incentives like mortgage rate buy-downs and amenity upgrades. Townhomes and other lower-cost projects are on the rise, offering more options for first-time buyers.
Looking for guidance in this expanding market? Allure Brokerage can connect you with the best properties, whether you’re searching for a new home or ready to list.
Mortgage Rates Find a ‘New Normal’
With rates hovering near 6%, the era of ultra-low pandemic rates seems firmly in the past. This new normal is still below historical averages, which may prompt more sellers to move past the “lock-in effect” and list their homes.
Life events such as growing families, job relocations, and retirements are also expected to drive more homeowners to the market, making 2025 a year of opportunity for repeat buyers leveraging their home equity.
Steady Home Price Growth
Home prices are expected to rise at a slower pace, with a 2% increase projected for 2025. The average homeowner has seen significant equity growth, making them better positioned for their next move. In fact, one-third of repeat buyers are paying cash, reflecting the strength of their equity positions.
First-time buyers, however, continue to face challenges. With affordability slightly improving and more inventory entering the market, their share is expected to recover from the historic low of 24% in 2024.
When you’re ready to explore your options, contact Allure Brokerage. Our team of real estate professionals is committed to helping you achieve your goals, whether buying or selling in 2025.
Looking Ahead
The housing market in 2025 is poised for recovery, bringing a balanced mix of opportunities for buyers and sellers alike. Increased inventory, stabilized mortgage rates, and steady price growth set the stage for a promising year. While affordability remains a concern for some, the expanding market provides renewed hope for homeownership.
Curious about which housing markets are set to thrive? Keep an eye on the Top 10 Housing Hot Spots for 2025, and let Allure Brokerage help you find your place in this evolving market.