Realtor.com 2025 Housing Forecast
Mortgage rates are expected to keep mortgage payments essentially unchanged in 2025 despite continued home price growth. With Donald Trump’s victory in the 2024 election, the U.S. housing market could see significant shifts, from regulatory changes to tax policies, and potentially even a recalibration of housing supply and demand dynamics especially since President-elect Trump is a developer himself.
Under Trump’s previous administration, we saw tax cuts, deregulation, and a push for economic growth through business-friendly policies. Many of these initiatives could return in a Trump-led 2025, potentially affecting everything from mortgage rates to new construction projects and homeownership affordability. However, the market's overall trajectory will also depend on broader economic factors, including interest rates, inflation, and shifts in demographic trends.
In this forecast, we’ll explore what homebuyers and sellers can expect from the housing market in 2025, considering key factors like government policy, market conditions, and the ongoing challenges of housing affordability and supply. Whether you’re looking to buy, sell, or simply stay informed, understanding the potential impact of a Trump administration on the housing market will be crucial as we enter a new phase in the American economy and political atmosphere.
| 2025 Realtor.com® Forecast | 2024 Realtor.com® Full Year Expectations | 2023 Historical Data | 2013-2019 Historical Average | |
|---|---|---|---|---|
| Mortgage Rates | 6.3% (avg); 6.2% (yr-end) |
6.7% (avg); 6.7% (yr-end) |
6.8% (avg); 6.6% (yr-end) |
4.0% (avg) |
| Existing Home Median Price Appreciation (Y/Y) | 3.7% | 4.0% | 1.1% | 6.5% |
| Existing Home Sales (Y/Y | Annual Total) | 1.5% 4.07 million |
1.8% 4.02 million |
18.7% 4.09 million |
2.1% 5.28 million |
| Existing Home For-Sale Inventory (Y/Y) | 11.7% | 15.2% | 4.4% | 3.6% |
| Single-Family Home Housing Starts (Y/Y | Annual) | 13.8% 1.1 million |
4.4% 1.0 million |
5.7% 0.9 million |
0.8 million |
| Homeownership Rate | 65.3% | 65.6% | 65.9% | 64.2% |
| Rent Growth | 0.1% | 0.2% | 1.2% | 5.2% |
This past year brought us a surprising upward trend in home price growth despite the persistence of high mortgage rates and rising inventory. Our full-year expectation for 2024 home price growth is 4%, up significantly from the 1.1% rate of 2023. What’s more, we expect home prices to continue to rise in 2025, although at a slightly lower pace of 3.7%. Why? While we’re forecasting mortgage rates to be slightly lower than they were in 2024, with an average monthly rate of 6.3% and year-end rate of 6.2%, we’re also expecting existing for-sale inventory to be 11.7% higher in 2025 than in 2024 (as detailed below). We think the downward pressure on price growth due to this supply-side effect will slightly win out over the upward pressure on price growth due to falling mortgage rates next year (at least compared with the relative balance this year).
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By: Realtor.com I December 3, 2024