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The rate on the popular U.S. 30-year fixed-rate mortgage will average around 6.0% next year and help to boost new housing construction and stimulate demand for previously owned homes, the National Association of REALTORS® predicted on Thursday.
The NAR also projected 4.5 million existing home sales in 2025 and forecast house prices increasing by about 2%. It estimated a $410,700 median existing home price.
"If rates stabilize around 6%, about 6.2 million households can once again be able to afford median-priced homes, compared to the current constraints with rates near 7%," NAR said.
The NAR forecast 1.45 million housing starts next year, the bulk of them for single-family units.
"Lower rates can significantly benefit homebuilders by reducing financing costs and boosting market confidence," the REALTORS® group said. "However, inventory levels are still expected to fall short of pre-pandemic norms, continuing to present challenges for buyers."