Housing Market Outlook: A Brighter Future Ahead
Anya’s Market Bites:
The housing market, which has faced challenges since rising mortgage rates in 2022, may soon experience a significant turnaround. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR), predicts a 9% increase in home sales in 2025 and a further 13% in 2026. Yun shared his insights at the NAR NXT conference in Boston, pointing to key factors driving these projections:
Employment growth: "When more people work, they are in a better position to buy a home," Yun emphasized.
Lower mortgage rates: Yun expects four rate cuts in 2025, potentially spurring housing demand.
Mixed Economic Signals: What to Expect
While Yun is optimistic, the Mortgage Bankers Association (MBA) offers a more cautious forecast:
Economic growth slowdown: After a strong 3.2% GDP growth in 2023, the MBA predicts slower growth at 2.3% in 2024 and below 2% through 2027.
Residential investment: Growth is expected to stabilize, with a modest 0.1% increase in 2024 before fluctuating between 1.1% and 3.3% in the following years.
Inflation leveling off: Consumer prices are anticipated to rise steadily between 1.9% and 2.3% annually, providing some stability.
Mortgage Rates: A Game Changer
Mortgage rates remain the pivotal factor for the housing market. Lower rates could unlock new opportunities for buyers and sellers alike. HousingWire's 2025 Housing Market Forecast predicts:
Home sales growth: A 5% increase in 2025, amounting to 4.2 million existing home sales.
Home-price appreciation slowing but staying positive: This offers a balanced market for buyers and sellers.
Political Factors and the Housing Market
Incoming President-elect Donald Trump’s preference for lower interest rates could further influence Federal Reserve policies under Jerome Powell. If rates decline as predicted, the housing market could see even stronger momentum.
Key Takeaways
The housing market is expected to rebound, with significant growth projected in 2025 and 2026.
Lower mortgage rates and stabilizing inflation could provide relief for buyers and sellers.
Political and economic factors will play a major role in shaping the market’s trajectory.
With the potential for economic stability and improved affordability, the next few years could bring exciting opportunities in the real estate market. Stay informed and be prepared to make the most of this recovery!
(Source: HousingWire)
All the best,
Anya Derebenskiy
(949) 942-5183
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