2025 U.S. Real Estate Predictions: A Glimmer of Hope for Homebuyers
More Inventory and Negotiation Room for Buyers
Zillow predicted a more active market with additional inventory for 2025, giving buyers more room to negotiate. However, homebuyers should expect some turbulence with fluctuating mortgage rates, even as more homes become available. Alana Mann, President of The Statesman Group of Companies, joined LiveNOW from FOX to discuss.
Positive Signs Emerging in the Real Estate Market
As consumers patiently wait for mortgage rates to settle, the Century 21 Real Estate CEO is flagging consumers about “positive signs” that are emerging from the real estate market.
“On the housing front, I think there are a couple of good, positive signs that are building momentum,” Mike Miedler began.
“This decade-long run up in price appreciation, which we’ve seen certainly double-digit price appreciation over the last four years, is starting to settle in a little bit. I think we’ll end the year anywhere from flat to 2% or 3% increase year-over-year,” the CEO explained.
Mortgage Rates and Demand
Miedler continued to break down some additional “good news” for the real estate market and its impact on investors’ economic outlook.
“The mortgage rates, even though they have come down just a little bit, they are creating more demand,” he said, Tuesday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage dropped to 6.69% — the lowest since October — from last week’s reading of 6.81%. The average rate on a 30-year loan was 7.03% a year ago.
Purchase Applications on the Rise
“Week-over-week, we’re up about 3% in purchase applications. And wow, that’s four consecutive weeks in a row. And believe it or not, you know where we were last year, but it’s about a 50% increase from November 2023,” the Century 21 CEO argued.
As the affordability crisis continues to drag on, a spike in purchasing applications could point to some demand finally being relieved.
Fed Rate Cuts and Housing Market Impact
The Century 21 CEO also broke down the impact that the Federal Reserve’s rate cuts have had on the housing market.
“We’ve seen the Fed start cutting in September. What that turned into was units across the country lifting and increasing [for the] first time year-over-year in October, increase in units since 2021,” he argued.
Biggest Issue Driving Rates
Miedler concluded by revealing what he believes to be the “biggest issue” that is driving rates.
“I think we’re seeing some positive signs,” he said. “Affordability is still the biggest issue, and that’s obviously mainly a driver of rates.”
Conclusion
While there are still challenges in the real estate market, the positive signs emerging from the industry are a welcome development for homebuyers. With more inventory available and mortgage rates stabilizing, it’s an exciting time to be in the market. However, it’s essential to remember that affordability remains the biggest issue, and it’s crucial for buyers to prioritize their finances and find the right mortgage options.
FAQs
Q: What are the positive signs emerging in the real estate market?
A: According to Century 21 Real Estate CEO Mike Miedler, the positive signs include a decrease in price appreciation, more inventory available, and a stabilization of mortgage rates.
Q: What is driving the increase in purchase applications?
A: The decrease in mortgage rates is creating more demand, with purchase applications up 3% week-over-week and 50% from November 2023.
Q: How have Federal Reserve rate cuts impacted the housing market?
A: The rate cuts have led to an increase in units across the country, with the first year-over-year increase since 2021.
Q: What is the biggest issue driving rates?
A: According to Miedler, affordability is still the biggest issue driving rates, and it’s essential for buyers to prioritize their finances and find the right mortgage options.
