The US housing market has experienced one of its slowest sales years in three decades, but experts predict a slight improvement in 2025. Several factors are expected to influence the market, including higher mortgage rates, record-high home prices, and an increase in inventory.
Despite the challenges, many realtors anticipate more homes will be listed for sale as buyers and sellers come to terms with the current higher-rate environment. However, homeowners who locked in lower rates earlier are now reluctant to move, citing concerns about taking on a new mortgage at a higher rate.
Realtor Scott Pratt expects an increase in inventory this spring, which could lead to better deals for buyers. Sellers who have been hesitant to list their properties may adjust their prices to meet the current market conditions.
Experts warn that homeownership remains unaffordable for many Americans, with median home prices about 30% higher than pre-pandemic levels. This has led to lower-than-expected transactions in recent years.
The recovery is expected to be slow, with existing home sales predicted to rise only 1.5% in 2025 to around 4.07 million units. Mortgage rates are forecast to average 6.3%, but some experts predict fluctuations and uncertainty amid the presidential transition and Federal Reserve rate-cutting cycle.
Different regions of the country will experience varying levels of price growth, with expensive coastal markets likely to see bigger gains due to a lack of new construction and affluent buyers. Conversely, cities in Florida and the Southeast may not see significant price increases, while lower-income areas may struggle to afford homes.
The Trump administration’s economic policies are also expected to impact the housing market, with some experts warning that proposed tax cuts and tariffs could worsen inflation and lead to higher interest rates.
Source: https://finance.yahoo.com/news/the-housing-market-should-pick-up-this-year-but-the-path-looks-choppy-133008183.html