Inventory gains bring first "balanced" market
in nine years, as the Trump administration takes
office
SANTA
CLARA, Calif., Dec. 4, 2024
/PRNewswire/ -- Broader economic factors are expected to have a
larger impact on the housing market than potential new federal
policies in 2025, according to the Realtor.com®
2025 Housing Forecast released today.
Realtor.com®'s forecast predicts home sale prices
will grow by 3.7%, mortgage rates will stay above 6% and rents will
remain virtually unchanged (-0.1%). Growth in inventory with single
family home starts is expected to grow 13.8% and existing for-sale
home inventory is expected to grow by 11.7%, which will help bring
the first balanced market in nine years.
"While President-elect Trump can work quickly with his
administration to implement some regulatory changes, other policies
that will affect housing, such as tax changes and broad
deregulation, require the cooperation of other branches and levels
of government," said Danielle Hale,
chief economist, Realtor.com®. "The size and direction
of a Trump bump will depend on what campaign proposals ultimately
become policy and when. For now, we expect a gradual improvement in
housing market dynamics powered by broader economic factors. The
new administration's policies have the potential to enhance or
hamper the housing recovery, and the details will matter."
In 2025, Realtor.com® forecasts that buyers and
sellers can expect:
- Average mortgage rates of 6.3%, with rates edging down
over the year to reach 6.2% by the end of the year
- Home prices will grow by 3.7% continuing growth
trends since 2012
- Rents will remain about the same with a slight 0.1%
drop
- A 11.7% increase in existing home inventory continuing
the trend from 2024
- Single-family new home starts will grow an impressive
13.8%, reaching 1.1 million homes, a figure not seen since
2006
- Home sales will grow 1.5% year over year to 4.07
million
- Months' supply, a key market balance indicator,
is expected to improve from a 3.7 month average in 2024 to
4.1 months in 2025. Anything under 4 is typically considered a
seller's market, while 4 to 6 months of supply is typically
considered a balanced market.
How could President-elect Trump policies impact the housing
forecast in 2025?
A Republican sweep of the presidency and
both houses of Congress will likely result in pros and cons for the
housing market. Among President Trump's proposals to address the
housing shortage is making more federal land available for
homebuilding and addressing regulation, which estimates suggest
contributes to more than $90,000 of
the cost of a new home, and could help bolster supply. Post
election, markets have generally pushed longer-term rates higher,
anticipating either higher inflation, larger deficits, stronger
economic growth or some combination.
What should buyers and sellers expect in 2025?
Overall
buyers and sellers should expect to see a more balanced market in
2025, which will require some give and take on both sides.
Homebuyers frustrated by higher interest rates will have some
buyer-friendly conditions in 2025, such as the highest for-sale
inventory since December 2019 and
nearly 20% of listings coming with price cuts. Mortgage rates are
expected to improve slowly in 2025, but the drop likely won't move
the needle back towards a seller's market. Buyers should expect a
friendlier, less competitive housing market than in past years,
although one that is still costly because of stubbornly high
mortgage rates and home prices.
Limited inventory and strong demand in many areas could mean
that sellers still have the upper hand in terms of negotiating
prices, especially in desirable locations. However, higher interest
rates or slower than expected income growth could lead to fewer
buyers being able to afford homes, which might result in longer
selling times or price reductions in some markets.
Key Trends and Wildcards to Watch in 2025:
Slight
rebound in overall home sales – The 2025 forecast has home
sales slightly increasing, with an expected annual count of sales
to be 1.5% more than 2024, for an annual tally of 4.07 million
sales. As mortgage rates ease back in 2025, the market is likely to
see slightly more activity during the busier summer months,
compared to last year.
Mortgage rates – While markets are factoring in
expectations of a higher-rate environment than previously thought,
there is uncertainty around which policies will take priority and
whether the specifics match or merely rhyme with campaign promises.
These details will matter for the outlook and for mortgage
rates.
Rent prices will largely remain the same, more rental supply
growth in the South – While the surge in new multifamily supply
offers renters more options, the large renter population will
dampen any significant impact on rental prices. The median asking
rent in 2025 is expected to be only slightly lower than in 2024
(-0.1%). Looking ahead to 2025, recent construction trends suggest
all four regions will see continued growth in rental stock, with
the South leading at an annual increase rate of 1.5%, followed by
the West (1.2%), Midwest (0.9%) and Northeast (0.7%). It is likely
that Southern rental markets will maintain a relative affordability
advantage in 2025.
Big increases in both new home sales and new home starts
– While existing home sales are expected to remain largely
unchanged for the year in 2025, new home sales and single-family
housing starts are expected to outperform. With a substantial
construction deficit over the last decade, builders have room to
run and may get an additional boost from a builder-friendly
administration that understands the need for more construction.
Single-family starts are expected to total 1.1 million in 2025, an
impressive 13.8% pickup over 2024.
"While more inventory means buyers will likely have more time to
make purchase decisions in 2025, in any market, a fast-acting buyer
will have a higher likelihood of making the winning offer," said
Hale. "For this reason, it's wise to get prepared financially and
for the home search overall. Thankfully for homebuyers there are
more tools, like Realtor.com®'s dynamic map layer, to
help home buyers and sellers get ready."
When faced with an overwhelming amount of market information,
Realtor.com®'s dynamic map layers can help consumers
make better sense of it. These new map-based search features allow
buyers and sellers to explore a wide range of neighborhood and home
details with just a quick glance, such as home estimates, lot size,
year built, sold price, sold price per sq ft, market hotness,
climate factors and more.
For more information about the Realtor.com® 2025
housing forecast, visit:
https://www.realtor.com/research/2025-national-housing-forecast/
Local Market Predictions – 100 Largest U.S. Metros (in
alphabetical order)
|
Metro
|
2025
Sales
Growth %
y/y
|
2025 Price
Growth %
y/y
|
|
Akron, OH
|
15.0 %
|
4.2 %
|
|
Albany-Schenectady-Troy, NY
|
10.3 %
|
6.6 %
|
|
Albuquerque,
NM
|
-4.1 %
|
-4.2 %
|
|
Allentown-Bethlehem et
al, PA-NJ
|
12.3 %
|
8.0 %
|
|
Atlanta-Sandy Springs
et al, GA
|
15.1 %
|
10.2 %
|
|
Augusta-Richmond
County, GA-SC
|
14.2 %
|
5.8 %
|
|
Austin-Round Rock,
TX
|
14.5 %
|
10.2 %
|
|
Bakersfield,
CA
|
9.9 %
|
6.0 %
|
|
Baltimore-Columbia-Towson, MD
|
16.2 %
|
2.7 %
|
|
Baton Rouge,
LA
|
5.5 %
|
2.7 %
|
|
Birmingham-Hoover,
AL
|
-8.3 %
|
2.3 %
|
|
Boise City,
ID
|
2.0 %
|
12.3 %
|
|
Boston-Cambridge-Newton, MA-NH
|
-1.8 %
|
5.6 %
|
|
Bridgeport-Stamford-Norwalk, CT
|
-5.4 %
|
4.9 %
|
|
Buffalo-Cheektowaga et
al, NY
|
9.7 %
|
8.5 %
|
|
Cape Coral-Fort Myers,
FL
|
13.2 %
|
9.6 %
|
|
Charleston-North
Charleston, SC
|
5.8 %
|
7.0 %
|
|
Charlotte-Concord et
al, NC-SC
|
15.7 %
|
8.4 %
|
|
Chattanooga,
TN-GA
|
2.2 %
|
6.3 %
|
|
Chicago et al,
IL-IN-WI
|
12.4 %
|
4.5 %
|
|
Cincinnati,
OH-KY-IN
|
8.2 %
|
7.3 %
|
|
Cleveland-Elyria,
OH
|
9.4 %
|
5.0 %
|
|
Colorado Springs,
CO
|
27.1 %
|
12.7 %
|
|
Columbia, SC
|
12.1 %
|
8.2 %
|
|
Columbus, OH
|
3.4 %
|
5.7 %
|
|
Dallas-Fort
Worth-Arlington, TX
|
7.6 %
|
9.2 %
|
|
Dayton-Kettering,
OH
|
2.3 %
|
4.3 %
|
|
Deltona-Daytona Beach
et al, FL
|
7.2 %
|
11.5 %
|
|
Denver-Aurora-Lakewood,
CO
|
13.6 %
|
8.0 %
|
|
Des Moines-West Des
Moines, IA
|
2.7 %
|
4.9 %
|
|
Detroit-Warren-Dearborn, MI
|
2.4 %
|
6.2 %
|
|
Durham-Chapel Hill,
NC
|
14.1 %
|
10.1 %
|
|
El Paso, TX
|
19.3 %
|
8.4 %
|
|
Fresno, CA
|
8.1 %
|
5.1 %
|
|
Grand Rapids-Wyoming,
MI
|
3.9 %
|
7.7 %
|
|
Greensboro-High Point,
NC
|
17.3 %
|
7.7 %
|
|
Greenville-Anderson-Mauldin, SC
|
5.1 %
|
8.9 %
|
|
Harrisburg-Carlisle,
PA
|
16.8 %
|
5.1 %
|
|
Hartford-West Hartford
et al, CT
|
3.8 %
|
5.6 %
|
|
Houston-The Woodlands
et al, TX
|
7.2 %
|
7.3 %
|
|
Indianapolis-Carmel-Anderson, IN
|
7.7 %
|
8.2 %
|
|
Jacksonville,
FL
|
13.5 %
|
9.8 %
|
|
Kansas City,
MO-KS
|
6.7 %
|
6.9 %
|
|
Knoxville,
TN
|
3.7 %
|
8.3 %
|
|
Lakeland-Winter Haven,
FL
|
10.6 %
|
10.3 %
|
|
Lansing-East Lansing,
MI
|
10.3 %
|
4.9 %
|
|
Las
Vegas-Henderson-Paradise, NV
|
5.5 %
|
12.3 %
|
|
Little Rock et al,
AR
|
18.6 %
|
4.8 %
|
|
Los Angeles-Long Beach
et al, CA
|
4.2 %
|
5.5 %
|
|
Louisville et al,
KY-IN
|
4.6 %
|
6.1 %
|
|
Madison, WI
|
-8.4 %
|
5.5 %
|
|
McAllen-Edinburg-Mission, TX
|
19.8 %
|
7.0 %
|
|
Memphis,
TN-MS-AR
|
8.3 %
|
10.5 %
|
|
Miami-Fort Lauderdale
et al, FL
|
24.0 %
|
9.0 %
|
|
Milwaukee-Waukesha et
al, WI
|
8.6 %
|
5.7 %
|
|
Minneapolis et al,
MN-WI
|
6.3 %
|
6.2 %
|
|
Nashville-Davidson et
al, TN
|
4.5 %
|
8.3 %
|
|
New Haven-Milford,
CT
|
-8.4 %
|
9.7 %
|
|
New Orleans-Metairie,
LA
|
1.7 %
|
5.9 %
|
|
New York-Newark et al,
NY-NJ-PA
|
11.0 %
|
5.9 %
|
|
North Port-Sarasota et
al, FL
|
3.2 %
|
10.4 %
|
|
Ogden-Clearfield,
UT
|
2.2 %
|
11.8 %
|
|
Oklahoma City,
OK
|
8.4 %
|
6.6 %
|
|
Omaha-Council Bluffs,
NE-IA
|
2.5 %
|
5.8 %
|
|
Orlando-Kissimmee-Sanford, FL
|
15.2 %
|
12.1 %
|
|
Oxnard-Thousand
Oaks-Ventura, CA
|
8.2 %
|
8.0 %
|
|
Palm Bay-Melbourne et
al, FL
|
0.8 %
|
9.6 %
|
|
Philadelphia et al,
PA-NJ-DE-MD
|
12.3 %
|
6.1 %
|
|
Phoenix-Mesa-Scottsdale, AZ
|
12.2 %
|
13.2 %
|
|
Pittsburgh,
PA
|
1.9 %
|
4.7 %
|
|
Portland-South
Portland, ME
|
-1.5 %
|
6.1 %
|
|
Portland-Vancouver et
al, OR-WA
|
11.1 %
|
6.7 %
|
|
Providence-Warwick,
RI-MA
|
-14.7 %
|
7.2 %
|
|
Raleigh, NC
|
2.2 %
|
9.0 %
|
|
Richmond, VA
|
21.6 %
|
6.1 %
|
|
Riverside et al,
CA
|
11.4 %
|
8.8 %
|
|
Rochester,
NY
|
8.7 %
|
6.8 %
|
|
Sacramento--Roseville
et al, CA
|
5.2 %
|
8.9 %
|
|
Salt Lake City,
UT
|
9.7 %
|
7.1 %
|
|
San Antonio-New
Braunfels, TX
|
6.7 %
|
10.0 %
|
|
San Diego-Carlsbad,
CA
|
10.9 %
|
9.1 %
|
|
San Francisco-Oakland
et al, CA
|
3.4 %
|
7.3 %
|
|
San Jose-Sunnyvale et
al, CA
|
4.6 %
|
7.5 %
|
|
Scranton--Wilkes-Barre
et al, PA
|
-10.3 %
|
4.0 %
|
|
Seattle-Tacoma-Bellevue, WA
|
11.6 %
|
5.7 %
|
|
Spokane-Spokane Valley,
WA
|
12.2 %
|
6.9 %
|
|
Springfield,
MA
|
-0.4 %
|
8.7 %
|
|
St. Louis,
MO-IL
|
11.0 %
|
6.8 %
|
|
Stockton-Lodi,
CA
|
6.2 %
|
9.8 %
|
|
Syracuse, NY
|
1.7 %
|
6.7 %
|
|
Tampa-St. Petersburg et
al, FL
|
9.1 %
|
11.8 %
|
|
Toledo, OH
|
10.8 %
|
6.7 %
|
|
Tucson, AZ
|
12.5 %
|
12.4 %
|
|
Tulsa, OK
|
2.5 %
|
6.5 %
|
|
Urban Honolulu,
HI
|
13.4 %
|
6.7 %
|
|
Virginia Beach et al,
VA-NC
|
23.4 %
|
6.6 %
|
|
Washington et al,
DC-VA-MD-WV
|
17.0 %
|
5.0 %
|
|
Wichita, KS
|
3.0 %
|
6.2 %
|
|
Winston-Salem,
NC
|
7.7 %
|
9.2 %
|
|
Worcester,
MA-CT
|
1.2 %
|
8.0 %
|
Methodology
Realtor.com®'s model-based
forecast uses data on the housing market and overall economy to
estimate values for these variables for the year ahead. The
forecast result is a projection for annual total home sales
increase (total 2025 existing-home sales vs. 2024) and annual
median home sales price increase (2025 median existing-home sales
price vs. 2024).
About
Realtor.com®
Realtor.com® is an
open real estate marketplace built for everyone.
Realtor.com® pioneered the world of digital real
estate more than 25 years ago. Today, through its website and
mobile apps, Realtor.com® is a trusted guide for
consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
and creating confidence through expert insights and guidance. For
professionals, Realtor.com® is a trusted partner
for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
Media Contact
Mallory
Micetich, press@realtor.com
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