Things to pay attention to in the real estate market in 2025 | Real Time Headlines

Housing isn’t cheap – whether you’re Buy or rent.

The median sales price for a single-family home in the United States was $437,300 in October, up from $426,800 a month earlier. according to Latest data from the U.S. Census.

Meanwhile, the U.S. median rent in October was $1,619, which was basically the same or up 0.2% year-on-year and down 0.6% compared to the previous month. according to Redfin is an online real estate brokerage.

While it’s difficult to predict exactly how the housing market will develop in 2025, several economists have made predictions about what might happen next year new Report from online real estate brokerage Redfin.

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“If the housing market was going to collapse, it would have collapsed by now,” said Daryl Fairweather, chief economist at Redfin. “The housing market is so exposed to rising interest rates.”

Here are five predictions for the housing market in 2025, according to Fairweather and other economists.

At the beginning of 2024, the growth rate of house prices will slow down to pre-pandemic levels. In other words, although prices are still rising, they are not rising as fast as in previous years.

Despite forecasts for slower growth, some price volatility is likely.

In fact, home price appreciation is likely to remain flat at less than 1% heading into the spring 2025 home buying season, CoreLogic economist Selma Hepp said.

But the possibility that President-elect Donald Trump will enact some economic policies could Causing housing prices to rise sharplysaid Jacob Channel, senior economist at LendingTree.

“We have some mixed signals right now in terms of what may or may not happen with house prices,” he said.

General tariff about foreign goods and materials also mass deportations This could lead to higher construction costs and a slowdown in homebuilding activity. If fewer homes are built in a market with limited supply, prices could rise much higher, Channel said.

Nationally, U.S. median rent could remain flat through 2025 as New rental inventory According to Redfin, it’s available now.

“If rents are flat and people’s wages continue to grow, that means people have more money to spend,” Redfin’s Fairweather said. increase savings.

more than 21 million renting households yes”cost burden”, which means they spend more than 30% of their income on housing expenses, according to 2023 U.S. Census data.

A stable rental market will also give renters greater leverage in negotiating with landlords. Experts say that in some areas, property managers are already offering deals such as a month’s free rent, free parking or waived fees.

However, “it’s December,” the channel said. “Rent prices typically drop during the colder months of the year” because fewer people are looking for apartments in late fall and winter.

He said competition in the rental market could ensue if potential buyers continue to be priced out of the for-sale market next year due to high home prices and mortgage rates.

Also keep in mind, Hupp explains, that the typical rental prices you see will depend on what’s going on in the local market.

For example: Austin, Texas, is “the epicenter of multifamily construction,” she said, which means a lot of new supply has been added to the city’s rental market, driving down rental costs. CoreLogic says rental prices in the metro area fell 2.9% year-on-year established.

By comparison, metropolitan areas with limited supply, such as Seattle, Washington, D.C., and New York City, are seeing rent growth of 5% annually.

However, experts predict that by 2025 it will be “Bumpy” and “Unstable” Mortgage interest rate year.

Borrowing costs for home loans could surge if policies such as tax cuts and tariffs are implemented, putting upward pressure on inflation.

“We are in uncharted territory. It’s hard to say exactly what will happen,” the LendingTree channel said.

Mortgage rates fall expected this fall first interest rate Reduction effective from March 2020. Borrowing costs soar Bond markets again in November reacted Donald Trump’s election victory. Since then, mortgage rates have temporarily stabilized.

“Our expectation is that going into 2025, rates will be in the 6% range,” said Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors. recent told CNBC.

While more buyers are expected to enter the market next year, the level of competition may not be as fierce as in recent years. bidding war It’s the norm.

CoreLogic’s Hupp said other affordability factors could also come into play, such as rising insurance costs and property taxes, slowing competition.

“We’re definitely going to see more buyers,” she said. “But I don’t think the competition will heat up to the level it has in the past few years.”

For example, home insurance policy It’s hard to come by in some of these markets, and prices tend to be high. The financial impact of natural disasters may also be reflected in rising costs for home maintenance and repairs, Redfin’s Fairweather said.

Even more challenging, she said, “every region of the country is vulnerable” because weather patterns are changing. “Recently, these atmospheric rivers in California have caused severe flooding for many days, and these homes were not built for that.”

While there is a lot of focus on hurricane risk in Florida, the state is better prepared for the natural disaster, unlike mountain cities like Asheville, North Carolina, which were hit by Hurricane Milton earlier this year.

“We’re likely to see a significant increase in insurance because homes are not built for the climate they’re going to face in the coming years,” she said.