2025 Housing Forecast: Real Estate Market Predictions
Mortgage rates are anticipated to remain stable in 2025, despite ongoing home price growth. The real estate market may experience significant changes with Donald Trump’s victory in the 2024 election. His previous administration was known for tax cuts, deregulation, and pro-business policies, which could potentially impact mortgage rates, new construction projects, and homeownership affordability in 2025.
Under a Trump-led administration in 2025, we might see a return of these initiatives, influencing various aspects of the housing market. However, the overall direction of the market will also be shaped by broader economic factors like interest rates, inflation, and demographic trends. It’s crucial for homebuyers and sellers to understand how government policies, market conditions, and housing affordability issues could affect the housing market in the coming year.
Despite the forecast of slightly lower mortgage rates in 2025 compared to 2024, the existing inventory for sale is expected to increase by 11.7%. This surplus of supply could potentially dampen home price growth, counteracting the impact of lower mortgage rates on price appreciation.
Looking back at 2024, we saw a surprising increase in home prices despite high mortgage rates and rising inventory. The full-year expectation for 2024 home price growth is 4%, significantly higher than the 1.1% growth in 2023. While we anticipate a similar upward trend in home prices for 2025, the pace of growth is expected to slow to 3.7%. This forecast considers the balance between slightly lower mortgage rates, higher inventory levels, and the potential income growth under a new administration.
Overall, the 2025 housing market forecast suggests a mix of factors at play, including government policies, market conditions, and broader economic trends. It’s essential to stay informed about these developments whether you are planning to buy, sell, or simply keep an eye on the real estate market.
