Zillow Housing Price Predictions for 2025
The Impact of Interest Rate Reductions
Recent interest rate reductions have caused many people to consider purchasing a home. According to the real estate information company Zillow, that trend will continue in the new year. The Federal Reserve reduced the interest rate three consecutive times in 2024, but what will 2025 be like?
Marta Rey Babarro, the VP of Research/Insights at Zillow, said, “We are going to see variability in those mortgages, it’s not going to be complete smooth sailing throughout the entire year.” When mortgage rates go down, we see more people accessing new homes and more homes in the market.
Increased Supply of Single-Family Homes
According to experts at Zillow, during 2025 more single-family homes will enter the market than we have seen in the last five decades. But why? “During the pandemic, there was a huge boom from construction companies on making new homes, those homes are finalized, and they will be hitting the market in 2025,” explained Babarro.
Shift to Smaller Properties
According to Zillow predictions, buyers will be looking for smaller properties, a stark shift from what we saw during the pandemic when they wanted spacious homes. “People were looking to more cozy places. They wanted to access that first home, and the square meters and those gigantic floor plans were not needed like in the years after the pandemic,” said Babarro.
South Florida Market Trends
As for the South Florida market, they expect prices to continue rising. “For Miami, we see in 2025 that the prices of homes will go up by 4%. So, homeowners will see that investment continue to go up.” Aside from the migration we’ve seen from other states, Zillow experts say a new generation of buyers will impact prices: millennials.
Millennials and the Housing Market
Millennials are the largest segment of the market that is looking for a home. Babarro predicts they will create pressure on prices, and those prices will most likely rise.
Zillow’s Advice for Homebuyers
If you are thinking of buying a home, Zillow says you should:
* Hire a real estate agent who can guide you.
* Plan well to see how much you can really spend. Zillow has a tool in their app called Buyability that helps you determine that.
* Know the area you are buying in well, including the weather risks you could face—it’s data they recently added to the Zillow app in the section called Climate Risks.
Sustainable Properties on the Rise
Speaking of the climate, another prediction from Zillow is that buyers will look for more sustainable properties with features like solar panels that reduce energy consumption.
Conclusion
In conclusion, Zillow’s predictions for 2025 suggest a continued trend of interest rate reductions, increased supply of single-family homes, and a shift towards smaller properties. The South Florida market is expected to see prices rise, driven in part by millennials looking for their first home. By hiring a real estate agent, planning well, and considering sustainable features, homebuyers can navigate the market with confidence.
FAQs
Q: What is the predicted increase in single-family homes entering the market in 2025?
A: According to Zillow, more single-family homes will enter the market than we have seen in the last five decades.
Q: Why are buyers looking for smaller properties?
A: Buyers are looking for more cozy places, and the square meters and gigantic floor plans are no longer needed.
Q: What is the predicted increase in home prices in South Florida in 2025?
A: Zillow predicts that home prices in Miami will go up by 4% in 2025.
Q: What is the impact of millennials on the housing market?
A: Millennials are the largest segment of the market looking for a home, and their demand will create pressure on prices, likely causing them to rise.
