US Housing Market Outlook for 2025

a { color: #880000 !important; background: #ffeeee !important; } US Housing Market Outlook for 2025Housing Market > EconomyRealtor.com's housing forecast for 2025 indicates modest increases in home prices and sales, alongside persistent affordability challenges due to high mortgage rates. The report highlights a potential shift in market dynamics influenced by economic factors and new construction trends.

What's happened

Realtor.com's housing forecast for 2025 indicates modest increases in home prices and sales, alongside persistent affordability challenges due to high mortgage rates. The report highlights a potential shift in market dynamics influenced by economic factors and new construction trends.

Why it matters

What the papers say

According to Business Insider UK, Realtor.com predicts a 3.7% increase in home prices for 2025, with the median price reaching $435,400. Danielle Hale, the chief economist, noted that while the market may see gradual improvements, affordability remains a significant concern due to high mortgage rates, which are expected to stay above 6%. Thomas Ryan from Capital Economics echoed this sentiment, forecasting that mortgage rates will hover around 7% for much of 2025, exacerbating the affordability crisis. In contrast, Zillow anticipates a more active housing market with modest price increases of 2.6%, suggesting that buyers may gain leverage as inventory rises. This divergence in predictions highlights the uncertainty surrounding the housing market's recovery and the impact of economic policies under the new administration.

How we got here

The US housing market has been recovering from pandemic-induced disruptions, with rising home prices and mortgage rates creating affordability issues. Recent forecasts suggest a gradual improvement in market conditions, influenced by economic policies and inventory levels.

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