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Home Price Predictions

Experts generally expect home prices to continue increasing, but the pace of those increases should slow in 2025.

Fannie Mae expects home prices rising 6.1% year over year by the end of 2024. In 2025, home price growth could slow to 3% year over year. 

The Mortgage Bankers Association believes prices could rise 3.9% this year. By 2025 it sees price growth slowing to 2.7% year over year.

The National Association of Realtors thinks existing-home prices will increase 3.8% overall by the end of 2024, and that they'll increase by just 2% year over year by the end of 2025.

Mortgage Rate Predictions 

Mortgage rates have dropped a bit recently, with 30-year rates falling below 6% for the first time since early 2023, according to Zillow data.

While we may not the mortgage rates drop much further in 2024 as economic conditions have remained stable and future Fed cuts are already priced in. However, rates should go down in 2025.

Housing Inventory Forecast

For housing market conditions to improve, housing supply needs to increase. As mortgage rates decrease, more sellers should come onto the market and list their homes, increasing the number of for-sale homes available. 

In terms of new home construction, Fannie Mae expects the number of housing starts to end the year down 5.8% but increase 1.4% next year, driven largely by the construction of multifamily homes. The MBA says starts will rise 4.4% in 2025 and 1% in 2026.

Is it a good time to buy a house now?

Whether it's a good time to buy a house depends on a lot of different factors, including current mortgage rates, local housing market conditions, and your financial situation. 

Mortgage rates are down, which means it could be a good time to buy a house if you can afford to do so. You may also want to talk to a real estate agent about the current dynamics of your local housing market. If your market has a number of available homes in your price range and little competition, you could potentially get a good deal by buying now. 

What home sellers should know about the current housing market 

Many would-be sellers who are holding onto historically low mortgage rates have refrained from listing their homes this year since rates have been so high. But as mortgage rates trend down, giving up their current mortgage won't be as big of a deal.

If you're considering selling, conditions may be better in 2025. Mortgage rates are likely to be even lower than they are now, which will improve demand and make it easier to sell your home for its full price (or more). 

Source: Business Insider