The 2024 housing market is shaping out to be one of the slowest in recent memory, but what can the industry expect in 2025?
HousingWire Lead Analyst Logan Mohtashami and Altos Research Founder Mike Simonsen have compiled a comprehensive forecast for the 2025 housing market. The report offers hope that next year will be better than the last, but only to an extent.
The pair project 4.2 million in existing home sales in 2025. This is a 5% increase over 2024, which is on pace for 4 million transactions, a number that would represent the fewest home sales since the housing bubble burst in 2008.
For comparison, annual home sales over the last two decades have averaged 5.15 million, and sales topped out at 7 million in 2005.
Mortgage rates are a tricky variable in any forecast, particularly at this moment when the Federal Reserve may be slowing its roll on future interest rate cuts. HousingWire assumes mortgage rates will stay in a range between 5.75% and 7.25%.
With this assumption — in addition to ongoing affordability issues and low inventory — HousingWire’s analysts foresee home-price appreciation of 3.5%, less than the 5% growth seen in typical years. This forecast is higher than the average for the industry.
A shortage of homes for sale has been a prime impediment to the 2024 housing market, but HousingWire expects 13% growth in inventory, with a peak in October of 800,000 before finishing the year at 720,000.
This growth is in line with upward trends in inventory that began in 2022, when available homes for sale tanked to roughly 250,000.
HousingWire isn’t the only organization that’s made a housing market forecast for 2025.
HousingWire’s 2025 forecast of 3.5% home-price growth is at the higher end among the 13 examined, which averaged 2.6% growth. National Association of Realtors (NAR) Chief Economist Lawrence Yun projects a 2% rise in home prices in both 2025 and 2026. Fannie Mae expects its home price index to rise by 3%.
The range for projections for home sales is a little tighter than for home prices. HousingWire’s expectation of 4.2 million existing home sales is in line with Goldman Sachs (4.2 million) and the Mortgage Bankers Association (4.3 million). NAR is at the top of the range of other forecasts with a projection of 4.9 million sales.
