2025 Housing Market Outlook: What to Expect (Nationally)

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Interested in building wealth through Real Estate? Here's some valuable information for anyone looking to buy, sell, or invest in homes. As we step into 2025, there are some important things to know about the market. I’ve picked up some great insights from real estate data experts at MBS Highway, and I’m excited to share them with you!




Home Prices Are Going Up

Experts predict that home prices will grow by 4% to 4.5% this year. This is great news for homeowners! For example, if you own a $500,000 home, its value could go up by about $20,500 in 2025. Over the next five years, home values might increase by 30% to 35%, adding $150,000 to $175,000 to the price of a $500,000 home.


What’s Happening with Jobs and Inflation?

  1. Jobs: The unemployment rate may rise a little, from 4.2% to 4.5%. This means some people might have a harder time finding work, but it could also lead to lower interest rates.
  2. Inflation: The Core PCE, which is a measure of prices going up, is expected to drop from 2.8% to 2.2%. Lower inflation can help bring down mortgage rates, making it cheaper to buy a home.


Why Mortgage Rates Might Drop

Right now, the money market rate is 4.5%. Experts think it could fall to 3.25% or 3.5% because inflation is cooling and unemployment is rising. When this happens, mortgage rates usually go down. In the next six months, mortgage rates are expected to drop to 5.85%. This includes a 3.60% 10-year Treasury rate and a 2.25% spread. Lower mortgage rates mean buyers can save money on their loans.


Who’s Buying Homes?

Different generations are buying homes at different rates. As people get older, more of them buy homes. For example, many people in their 30s and 40s are becoming homeowners. This trend is likely to continue in 2025, keeping demand for homes strong.


What’s Happening with Home Listings?

  • Since 2018, the number of homes for sale has gone down by 21%, which means fewer choices for buyers and an increase in Demand. 
  • But compared to last year, the number of listings has gone up by 27%. This is good news for people looking to buy a home in 2025.


What Does This Mean for You?

If you’re buying a home, keep an eye on mortgage rates. Lower rates in the next six months could make homes more affordable. It’s also a good time to buy because home prices are expected to keep rising.

If you’re selling a home, there’s still strong demand, so you can get a great price for your property. Make sure to price your home wisely to attract buyers quickly.

If you’re an investor, the long-term growth in home prices—up to 35% in five years—makes real estate a smart investment.


Wrapping Up

Adding real estate to your portfolio can be life changing decision and this 2025 housing market is positioned to offer opportunities. Lower mortgage rates, steady home value growth, and increasing listings mean it’s a great time to plan your next move. If you have questions or need advice, feel free to reach out. Let’s make 2025 a fantastic year for your real estate goals!

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