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Top 5 predictions for 2025

Despite the setbacks we saw this year, 2025 will likely see many of the same trends come true that were initially predicted for 2024.

Coming into 2024, most economists were optimistic that housing was about to turn the corner and that sales activity would recover, fueled by falling mortgage rates. Those hopes were dashed by the stubborn increase in mortgage rates through May, which threw cold water on buyers hoping for a break after 2023’s punishing conditions.


Fortunes began to turn in the late summer and fall, though, fulfilling a glimmer of the rosy picture originally projected for 2024. We saw mortgage rates drop to almost 6 percent by mid-September, triggering an unusual burst of sales activity in the fall.


Mortgage rates later rebounded amid the uncertainty of the election and the stubbornly difficult “last mile” of inflation reduction. Still, despite this, I believe we are poised for many of the same trends originally predicted for 2024 to come to fruition in 2025.


Esto incluye nuevas caídas modestas en las tasas de interés, que, junto con el hecho de que el inventario finalmente se acerque a los niveles normales, ayudarán a impulsar una recuperación bienvenida en las ventas de viviendas existentes después de un año y medio de actividad de ventas en mínimos históricos. Esa oferta saludable de propiedades en venta también ayudará a mantener a raya el crecimiento de los precios, pero no lo hará negativo para el país en general.


Vea el video de arriba o lea a continuación el resto de mis predicciones de vivienda para 2025.


1. Las tasas de interés disminuirán

Espero que las tasas de interés caigan a alrededor del 6,5 por ciento en 2025, pero de manera gradual y en zigzag. Factores temporales, como la incertidumbre electoral, una mayor emisión de deuda del Tesoro y la volatilidad del mercado, ayudaron a impulsar las tasas hipotecarias nuevamente al alza en casi un punto completo el otoño pasado.


Pero el panorama general no ha cambiado tanto. Todavía estamos en la fase de enfriamiento de un ciclo económico, con una inflación en desaceleración, un mercado laboral en desaceleración y la Fed recortando las tasas a corto plazo. Aun así, si algo hemos aprendido en los últimos dos años es que las tasas de interés nunca llegan a su destino en línea recta.


2. Las ventas de viviendas existentes se recuperarán

Las ventas de viviendas existentes han tocado fondo y se recuperarán hasta un 10 por ciento interanual en 2025. El volumen de ventas se vio frenado por el bajo inventario de viviendas en el mercado en 2022 y 2023, pero vimos que los vendedores regresaron en 2024 y la actividad de los compradores realmente comenzó a recuperarse también en el otoño.


Buyers and sellers feel less uncertainty now and are getting more comfortable with the new normal range for interest rates, all of which is helping to thaw the market.


3. Home prices will not fall

Broadly speaking, U.S. home prices will not fall in 2025, but they’ll only rise by around 2 percent to 4 percent. The past three years have seen a roller coaster of gains and slowdowns when it comes to home prices, thanks to the fluctuation in interest rates and the changing supply of available homes for sale.


Now that inventory is back to a balanced level, especially in the Western United States, 2025 should see a more consistent market, causing prices to stabilize.


4. Affordability will start to improve

This might be surprising given the prediction that home prices will not fall, but affordability will gradually start to improve in 2025.


The main reasons for this are declining interest rates and rising incomes. The median U.S. household saw their income climb $10,000 over 2022 and 2023, from $70,000 to $80,000. Wages continued growing rapidly in 2024 and are expected to do the same in 2025. Those higher incomes and borrowing at somewhat lower interest rates are helping home buyers start to catch up with all the home price growth that has happened since 2020.


5. More parents will help with down payments

I believe parents helping with down payments will become more common and more important than ever in 2025. That’s because the high price of homes today means that homeownership feels out of reach for many first-time homebuyers.


However, those same high prices also mean that the baby boomer generation has a lot of home equity. So, as they discuss homeownership with their adult children, many parents see a down payment gift as one of the most meaningful ways to help them gain access to the American dream.


This is a picture of a housing market gradually settling into a new normal after several abnormal years. A bunch of superlatives will be fading in the rearview mirror, like “fastest price appreciation ever,” “lowest inventory ever,” “fewest new listings ever,” and “highest interest rates in 20 years.” This is a normalizing market, and that includes Americans learning to live with the new normal.


All right, those are my top five predictions for 2025, based on what I’m seeing in the market right now. I look forward to seeing how the new year plays out in the housing market and analyzing it on behalf of Windermere Real Estate.


By Jeff Tucker

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