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The U.S. housing market is scheduled to enter 2025, facing the same headwinds as this year. Mortgage rates are expected to remain volatile, and home prices are expected to continue their upward trajectory, albeit at a level At a slower pace than during the pandemic boom years.
Recent data suggests the market is in limbo, with the median price of a single-family home in October reaching $437,300, up from $426,800 in September, according to U.S. Census figures. Meanwhile, the rental market showed signs of slowing, with rents averaging $1,619 in October — virtually unchanged from the previous year, according to Redfin.
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“If the housing market was going to collapse, it would have already collapsed by now,” Redfin chief economist Darryl Fairweather told CNBC. “The housing market has been very resilient to record-high interest rates.”
Economists expect home prices to rise by about 4% throughout 2025, representing a return to pre-pandemic growth rates. However, Selma Heap, an economist at CoreLogic, told CNBC that price increases may remain steady through the spring buying season.
The rental landscape appears poised for transformation. The increase in new apartment construction is expected to keep national rent growth flat throughout 2025, which could strengthen the bargaining position of renters.
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Some property managers offer perks like free parking or waived fees to attract tenants.
Mortgage rates will likely remain a wild card. While Redfin expects an average of 6.8% in 2025, the path could change based on economic policies and inflation trends. Jessica Lautz, deputy chief economist for the National Association of Realtors, expects interest rates to stabilize in the 6% range by 2025.
Home sales volume may finally be on the rise after years of restrictions. According to a CNBC report, Redfin expects nearly four million homes to change hands in 2025, which represents a 2% to 9% increase from 2024. “People have waited long enough,” Fairweather said, noting Pent-up demand from buyers and sellers. Those who moved late.
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