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After home sales hit a 15-month low in summer, the housing market has been shifting toward the rosy real estate outlook economists are predicting for 2025.
In the latest sign of improvement, pending home sales—a gauge of future home sales based on contract signings—rose 2.2% month over month in November, the National Association of REALTORS® reports. Marking the fourth consecutive month of increases, contract signings are up nearly 7% from a year ago and are at their highest level since February 2023.
“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” says NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”
Several recent housing indicators have painted a healthier picture of the market:
- Existing-home sales jumped 5% annually in November.
- The median home price has climbed 4.7% year over year.
- The number of existing homes on the market is up nearly 18% from a year ago.
- New-home construction for single-family homes rose 7% annually in November.
Still, “some markets will outperform, driven primarily by local job gains and the flow of new inventory supply,” Yun says.
Contract signings were up annually in all four major regions of the U.S. in November; three posted a monthly uptick. The South saw the most notable monthly increase, with pending home sales up 5.2%. The Northeast was the only region to post a decline, with pending home sales falling 1.3% month over month. However, contract signings are still up in the region by nearly 6% compared to a year ago, NAR’s report shows.
What’s in Store for 2025?
Leading economists recently offered their 2025 housing market forecasts, as well as the markets expected to see the biggest sales increases, during NAR’s Real Estate Forecast Summit.
