Sara Hiatt November 6, 2024
As we get closer to 2025, a lot of my clients have been asking about what the housing market might look like in the coming year. While no one can predict the future, the experts I follow have some strong insights on where things may be headed. Here’s a quick look at the national housing forecast for 2025 and what it could mean for us here in Utah:
Softer Mortgage Rates in 2025
Good news: mortgage rates are expected to dip gradually throughout 2025. By the end of 2025, it is thought that rates could be in the low 5’s. This could be a game-changer for both buyers and sellers. For buyers, lower rates mean better affordability, and for sellers, more buyers could be coming into the market, making it easier to list and sell successfully. If you’ve been holding off on buying or selling, waiting for these rate drops might pay off.
Home Sales on the Rise
In 2024, the number of home sales remained relatively steady, but 2025 is shaping up to be more active. Experts project an increase in total home sales, forecasting around 5.4 million homes to sell nationwide. This uptrend is expected as lower mortgage rates entice more people into the market. For Utah, this could translate into more opportunities and choices for buyers, especially as inventory levels are also expected to improve.
What About Home Prices?
When it comes to home prices, the outlook for 2025 is fairly balanced. Nationally, home prices are projected to appreciate at an average rate of around 3%. While this is a steady climb, it’s more modest than what we’ve seen in previous years, which helps keep things affordable. Here in Utah, we might see similar trends, though remember that local markets can vary. Some areas could see slightly higher appreciation rates, especially those that continue to attract new residents. Overall, it’s a favorable forecast for both first-time buyers and those looking to move up in the market.
Buyers & Sellers on the Sidelines?
According to recent surveys, nearly half of potential buyers would consider purchasing a home if mortgage rates dropped below 6%, and over a third of current homeowners would be more inclined to sell under these conditions as well. This suggests that as rates soften, we could see a surge in both buyers and sellers entering the market. If you’re planning to buy or sell in 2025, you might find yourself in a much more active market with improved options and competition.
Wrapping Up
2025 is shaping up to be a promising year for real estate, with softening mortgage rates, rising home sales, and steady price growth. For those of you in Utah, these national trends are likely to reflect locally, though, as always, there may be some regional variations. Whether you’re a first-time buyer, a seasoned homeowner, or just keeping an eye on the market, staying informed can help you make the most of your opportunities in the year ahead. Feel free to reach out if you want to discuss how these trends could affect your specific goals. Here’s to a fantastic year for Utah’s real estate market!
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