2025 Housing Market Forecast: The Path to Home Sales Recovery
A strategic roadmap to help industry experts anticipate client needs, and understand the market recovery — from home price stability and transaction volumes to the influence of shifting mortgage rates.
What you’ll learn:
- Answers to these pertinent questions: Are we finally going to see a housing market recovery? If so, how much and when? What about home prices? Should we expect them to crash?
- Bear and Bull cases for a housing market recovery of both home sales and home prices.
- Mortgage rate trends and a prediction for 2025 rates.
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Introduction
As we enter 2025, the big questions looming over the real estate market are: Are we finally going to see a housing market recovery? If so, how much and when? What about home prices? Should we expect them to crash?
In this report, HousingWire Analyst Logan Mohtashami and Altos Research Founder Mike Simonsen share their analysis of the data to best answer these questions about the future of home sales and home prices.
As we begin 2025, American homeowners have record levels of equity, home prices remain steady, and the country still faces crisis levels of unaffordability, especially for first-time homebuyers.
As prices have stayed elevated, transaction volumes have not yet recovered. Mortgage rates finally dipped in the third quarter 2024, but what’s next?
We’ll analyze how many home sales to expect in 2025, and also look at scenarios for a significant recovery. As always, while we look at national trends, local and regional trends may differ. Some markets will show sharp home-price drops or higher home-price appreciation.
HousingWire 2025 Home Price and Home Sales Forecast
HousingWire forecasts:
- Home sales will grow in 2025 by 5%, resulting in 4.2 million existing home sales in 2025.
- Home-price appreciation will slow, but not turn negative in 2025. We anticipate approximately 3.5% home-price appreciation for calendar year 2025.
- Inventory will grow again in 2025 by 13%, peaking in October with nearly 800,000 single-family homes unsold on the market and ending the year with around 720,000 homes in inventory.
Other assumptions about the housing market and macroeconomy in 2025:
- Continued slight easing in mortgage rates to a range of 5.25% to 6.5% during the year. This range implies that rates are not forecasted to dramatically deteriorate, and there’s no sub-5% rates in sight. The range accommodates variability for the ups and downs of economic news during the year.
- Moderate economic growth, with low probability of recession in 2025.
- Increased unemployment and less optimism on employment prospects.
- The mortgage lock-in effect slowly continues to lessen its grip on homeowners.
