Category: Market Reports

The U.S. housing market is characterized by moderate inventory levels, with approximately 1.21 million existing single-family homes available. Despite rising inventory, affordability remains a significant challenge due to high mortgage rates and persistent home prices, leading to a slowdown in sales activity. Insights “We expect the economy to land softly and housing inventory to continue to recover. This should put downward pressure on mortgage rates this fall and winter and will set the stage for a much better season for homebuyers in 2025. Ralph McLaughlin, Senior Economist, Realtor.com “Fed interest rate cuts in general will bring about lower [mortgage] rates, which is a definite boost to the housing market, but it won’t happen overnight. Greg McBride, Chief Financial Analyst, Bankrate   Forecast Looking ahead to 2025, predictions indicate a slow but steady decline in mortgage rates as inflation stabilizes and the Fed potentially loosens its aggressive rate-hiking stance. By mid-2025, rates are anticipated to average around 6.1%, with some potential to fall below 6%. Experts expect the U.S. housing market in 2025 to remain stable but somewhat restrained, with many forecasts indicate only modest increases in home prices, typically between 0.5% and 4% nationally.     Rates As of late

As the market moves toward more balance between buyers and sellers, parties on both sides of the transaction need to be prepared to negotiate. Insights “Nearly 80% of economists surveyed by Bloomberg recently predict the Fed will make a quarter-point decrease to a range of 5% to 5.25% in September. Money.com “Timing the market is basically impossible. If you’re always waiting for perfect market conditions, you’re going to be waiting forever. Buy now only if it’s a good idea for you. Jacob Channel, Senior Economist, LendingTree Rates Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely. – Lawrence Yun, Chief Economist, NAR     Affordability The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes. – Mark Fleming Chief Economist, First American   Inventory Today’s market is considered balanced. “In general, a housing market with five to seven months of supply could be described as balanced between buyers and sellers.” – U.S. News, April 18th   Prices When inventory rises faster than demand, prices have to adjust eventually. Increasing inventory levels are a sign that the market is starting to balance out. –

There is an increase in the number of listings coming to market lately, which suggests that many homeowners can no longer put off moving. More listings and lower rates could create new opportunities for buyers. Insights “The hopes for lower interest rates need the reality check that ‘lower’ doesn’t mean we’re going back to 3% mortgage rates. Mortgage rates are 7% now and the best we may be able to hope for over the next year is 5.5 to 6%. Greg McBride Chief Financial Analyst, Bankrate “Inventory is finally turning up—up about 15%—and that likely is an early leading indicator that we may finally see more home sales as conditions improve. Lawrence Yun, Chief Economist, NAR     Rates Mortgage rates declined to their lowest level since early February. Expectations of a Fed rate cut coupled with signs of cooling inflation bode well for the market, but apprehension in consumer confidence may prevent an immediate uptick as affordability challenges remain top of mind. Despite this, a recent moderation in home price growth and increases in housing inventory are a welcoming sign for potential homebuyers. – Sam Khater, Chief Economist, Freddie Mac     Affordability While housing affordability is low for

Presidential election years affect the national housing market and mortgage rates as people prepare for economic and policy changes. Historically, existing home prices have increased in the last 7 of 8 presidential elections. Insights “One thing that seems to be pretty solid is that home prices are going to continue to go up, and the reason is that we don’t have housing inventory. Jessica Lautz, Deputy Chief Economist, NAR “Home sales have lingered at 30-year lows, and since 70 million more Americans live in the country now compared to three decades ago, it’s inevitable that sales will rise in coming years. Inventory will grow steadily from more home construction, and various life-changing events will require people to trade up, trade down or move to another location. Lawrence Yun, Chief Economist, NAR     Forecasts When it comes to the real estate forecast for the next 5 years, I’m cautiously optimistic. I believe we’re going to see a lot of ebb and flow over the next 5 years — some highs, some lows, but overall, a healthy market. Prices should continue to rise, though more slowly, and buyers might enjoy more options as inventory expands. But remember, real estate is profoundly

The overwhelming majority of prospective homebuyers believe that buying a home, now or in the future, is the best decision for them in the long run. While it’s easy to get pre-occupied with interest rates, they shouldn’t be the only part of your home buying decision-making process. Insights “Astonishingly, greater than 90 percent of the country’s metro areas experience home price growth despite facing the highest mortgage rates in two decades . . . In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand. Lawrence Yun, Chief Economist, NAR “Buy now, or wait? That’s the question prospective homeowners have been struggling to answer in today’s housing market. Home prices have been skyrocketing recently, and the Federal Reserve’s work to tame inflation sent mortgage rates soaring, too. The combination has led many would-be buyers to pick the “wait” side of the equation. Bankrate     Forecasts Zillow’s forecasts of home values and existing home sales were both revised downward this month. Zillow’s home value forecast now anticipates 0.6% growth over 2024, down from last month’s projection for 1.9% growth over 2024 and much slower than the pre-pandemic average annual appreciation rate of

While home prices are growing, home sizes are decreasing. More than a third of builders say they built smaller homes in 2023, and more than a quarter plan to construct even smaller this year, shares the NAHB. Home size is trending lower and will likely continue to do so as housing affordability remains constrained. Insights “The path to Gen Z homeownership may have its own share of challenges, but that’s not stopping Gen Z, nicknamed “Zoomers,” from buying homes. In fact, some Gen Z real estate trends are pointing in an optimistic direction. According to a recent study from a major real estate brokerage about 30% of 25-year-olds owned their own homes in 2022, 2-3% ahead of both millennials and Gen X at the same age. Chase “My personal forecast is that we will begin to see further progress on inflation this year. I don’t know that it will be sufficient; I don’t know that it won’t. I think we’re going to have to let the data lead us on that. Jerome Powell, Chairman, Federal Reserve   Rates After benefitting from stable mortgage rates in the first couple of months of the year, the housing market witnessed a slowdown in