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As the summer heat fades and cooler weather sets in, many are wondering if the change in seasons will bring a dip in home prices. What’s ahead as we approach the end of the year? And what’s the real estate forecast for 2025? Here’s a snapshot of what experts are saying.

There’s a lot of information out there, and it can be overwhelming for both buyers and sellers. But here’s the bottom line: Affordability is still a challenge.

 

Affordability and Inventory: The Current Market

Home prices, coupled with rising mortgage rates, continue to make affordability a significant hurdle for many buyers. However, inventory levels remain relatively low, which has kept competition among buyers fierce. We’re starting to see some shifts, though. Inventory is creeping up in certain markets, and homes are staying on the market a bit longer, signaling a possible change.

From an economic perspective, inflation continues to impact the country, and the Federal Reserve is considering lowering interest rates, which could offer some relief to buyers in the near future. But despite these factors, the housing market remains steady, and in many areas, it’s starting to normalize.

2025 Housing Market Predictions

While home prices have seen significant increases in recent years, 2025 is expected to bring more moderate growth. Real estate forecaster CoreLogic predicts a 3.4% year-over-year price growth in 2025, a decline from the 4.9% growth we’ve seen this year.

Keep in mind that the past five years were what many in the industry are calling the “Unicorn Years” for real estate, marked by skyrocketing demand and prices. A cooling off period is a natural part of the market cycle.

What to Expect Moving Forward

As we look ahead, it’s important to remember that real estate is highly localized. While national trends provide valuable insights, what happens in your local market may look very different. Some areas are seeing prices plateau, while others are experiencing changes in inventory and pricing.

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