Housing Market Insights: What to Expect as We Enter 2025

As we step into 2025, the housing market is undergoing its most significant seasonal slowdown in nearly two years. Elevated mortgage rates have played a pivotal role in shaping recent trends, leading to noticeable shifts across key market indicators.

Key Trends from December

1. Increased Time on Market
Homes lingered on the market for an average of 70 days in December, marking the slowest December in five years and the slowest month since January 2023. This is nine days longer than the same period last year and eight days longer than November, reflecting the impact of reduced buyer activity.

2. Inventory Dynamics
While active listings grew by 22% year-over-year—extending a 14-month trend of annual growth—seasonal factors brought the total number of homes for sale to its lowest level since June.

3. Median Listing Price Adjustments
The median listing price in December was $402,502, a 1.8% decrease compared to last year. However, the median price per square foot rose by 1.3%, indicating that buyers are favoring smaller, more affordable homes.

4. Regional Variations

• South and West: These regions saw the most significant inventory growth, with active listings increasing by 26.7% and 23.7%, respectively.
• Midwest and Northeast: Inventory growth was more modest, at 15.2% and 6.9%.

What’s Ahead for 2025?

Economists project a modest rebound for the housing market in 2025, driven by a combination of factors:

• Home Sales: A predicted increase of approximately 1.5%, signaling a potential uptick in buyer activity.
• Mortgage Rates: Forecasted to decline slightly, averaging around 6.3%, which could improve affordability.

While challenges remain, these shifts may create opportunities for both buyers and sellers as the year progresses.

How Does This Impact Your Real Estate Goals?

Whether you're planning to buy, sell, or invest in 2025, understanding the nuances of this evolving market is essential. If you have questions or would like to discuss how these trends align with your real estate objectives, give me a call.

Here’s to navigating the market with confidence in 2025!