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Home sales will rebound next year, prices will rise at a slower pace, and metro areas like Boston; Phoenix, and Grand Rapids, Mich., are poised to be some of the hottest housing markets. These are some of the forecasts for 2025 from the National Association of REALTORS®, a real estate trade group with 1.5 million members.
There are already signs of improvement in home sales after a second slow year, Lawrence Yun, the trade group's chief economist, said Thursday during the organization's annual real estate forecast summit. Existing-home sales in October rose above prior-year levels for the first time since July 2021, and contract signings have been on the upswing in recent months—"implying that worse is coming to an end, he said.
Existing-home sales are estimated to finish flat in 2024 compared with 2023's nearly three-decade low. Sales will rebound by between 7% and 12% in 2025, Yun said.
Home price gains will continue, but at a slower pace: the median previously owned home is expected to sell for $410,700 in 2025, up about 2% from this year's anticipated median sale price. "With more supply coming onto the market, home price growth could be more muted, more modest, Yun said. "Maybe it's a healthy thing; we want income to catch up with home prices.
Some housing markets will benefit more from stabilizing mortgage rates than others. The REALTORS® group evaluated over 350 metropolitan areas to identify those best positioned for 2025, focusing its criteria on potential drivers of demand and affordable supply.
"Important factors common among the top performing markets in 2025 include available inventory at affordable prices, a better chance of unlocking low mortgage rates, higher income growth for young adults and net migration into specific metro areas, Yun said in a statement.