Veterans United urges 2025 housing market rebound
The market is expected to start settling down in 2025, according to housing professionals. Veterans United Home Loans, the largest VA lender, predicts a gradual decline in mortgage rates and home price growth. They released a 2025 Housing Market Outlook report indicating that mortgage rates are likely to average 6.5% for the year but may decrease to 6.3% after anticipated Federal Reserve interest rate cuts. While these cuts are expected to happen, their impact on mortgage rates may not be immediate due to other economic factors at play.
Veterans United’s Vice President of Capital Markets, Joe Ellison, describes the 2025 housing market as a mix of opportunities and obstacles. Affordability is expected to remain a major challenge, with home prices forecasted to increase by 3.2% to a national average of $424,977. This aligns closely with estimates from HousingWire, which predicts a 3.5% home price growth.
Affordability issues stem from factors like fewer housing starts, increased building material and labor costs, and policy changes. Veterans United mentions creative financing solutions and government-backed loans, like VA, FHA, and USDA loans, as potential answers for moderate-income and first-time buyers. Refinance activity is expected to make up 15% to 20% of total mortgage activity, with homeowners possibly turning to home equity products and cash-out refinances for additional funds.
In conclusion, the 2025 housing market may present challenges, but there are also opportunities for buyers and sellers to navigate through. By staying informed and exploring different financing options, prospective homeowners can make informed decisions in the coming year.
