US job growth rebounds in November; unemployment rate ticks up
A closely-watched report from the U.S. Labor Department on Friday showed job growth surged in November, raising bets that the Federal Reserve would cut interest rates later this month. Nonfarm payrolls increased by 227,000 jobs, more than what economists polled by Reuters had expected.
Year-ahead forecasts are always a bit uncertain, and even housing market experts can make predictions in December that are quickly proven wrong by the first quarter of the following year.
However, it’s still valuable to listen to industry professionals, especially when there’s some consensus on what’s likely to happen in 2025. Below, we’ve gathered insights on key housing market issues that are important to Americans, such as mortgage rates, home prices, and sales volumes.
In short, while we shouldn’t expect a booming market next year, there should be some modest improvements in the real estate landscape.
Where Will Mortgage Rates Go in 2025?
“Mortgage rates are expected to stay in the high-6% range throughout 2025, with weekly rates fluctuating but averaging around 6.8%,” according to Redfin’s strategists.
Experts from Fannie Mae and Pulsenomics, LLC predict that “mortgage rates will remain high but should decline modestly over the year, reaching 6.3%.”
Realtor.com also anticipates a full-year average of 6.3%, while the Mortgage Bankers Association forecasts an average rate of 6.4%.
Will Home Prices Rise in 2025?
Redfin predicts a 4% increase in the median home-sale price.
The Fannie Mae/Pulsenomics forecast calls for a 3.8% gain.
Zillow expects home values to grow by 2.6%.
The Mortgage Bankers Association anticipates a more modest 1.5% rise.
Will Home Sales Rise in 2025?
The Mortgage Bankers Association predicts home sales will increase by 5.1%.
Zillow forecasts a 7% boost.
Fannie Mae’s economics team projects a 4.2% increase.
The National Association of Realtors is more optimistic, expecting a 9% rise in home sales.
According to Zillow’s forecast, pet-friendly policies will become a “nonnegotiable” requirement for rental property managers. As they point out, renters are getting older and are increasingly embracing milestones like moving in together or getting a pet before purchasing a home. In fact, 58% of renters now have a pet, up from 46% before the pandemic, and many renters report passing on properties that don’t allow pets.
The Realtor.com team also predicts that 2025 will be the most buyer-friendly market since 2016. They anticipate the inventory of homes for sale will be the highest since just before the pandemic. According to their forecast, there will be 4.1 months of available inventory, which is considered a balanced market. They explain that anything under 4 months typically indicates a seller’s market, while 4 to 6 months is balanced. A buyer’s market, which would require more than 6 months of inventory, is not expected to emerge anytime soon.
