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US Housing 2025: Affordability Hurdles and Emerging Seller Trends
- 2025/01/08
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あらすじ・解説
The US housing industry is entering 2025 with two major trends to watch: affordability and the return of sellers to the market. The latest data indicates that home prices finished 2024 up a few percent nationally, and mortgage rates are at their highest level in seven months, exceeding 7% as we head into January[1][2].
Affordability remains a significant concern, with the typical mortgage payment for homebuyers starting 2025 at the highest level ever, at $2,290. This situation is exacerbated by high mortgage rates, which are expected to stay elevated in the sixes for most of the year. However, there is a possibility of rates dropping over 100 basis points if economic news improves and spreads tighten[1].
On the supply side, inventory continues to contract, with 651,000 single-family homes unsold on the market, 2.5% fewer than the previous week. However, this contraction is expected to reverse by February, with inventory increasing in most markets around the country. The Sun Belt markets have led inventory growth, but this disparity is expected to even out in 2025[1][2].
There are signs that seller volume is starting to return to normal levels. The last week of 2024 saw 32,500 new listings, 33% more than the same week in 2023. This increase in new listings could indicate that the shortage of sellers is finally abating[2].
Pending home sales are up 4.25% compared to the end of 2023, with 269,000 single-family homes under contract. This is a positive sign, but it is still 30% fewer than at the start of 2022 when the pandemic frenzy was still underway. The forecast for 2025 includes a 5% sales growth over 2024[1][2].
Price reductions are higher than in Q1 2024, with 36% of homes on the market having taken a price cut from the original list price. This indicates a slightly weaker supply-demand balance than a year ago. However, this number is expected to fall in the spring with fresh inventory and new buyers[1][2].
In contrast to the cautious outlook from HousingWire, Lawrence Yun, chief economist of the National Association of REALTORS, predicts a rosier forecast for 2025 and 2026, with an outlook for higher home sales and moderating mortgage rates. Yun forecasts existing home sales to rise 9% year-over-year in 2025 and new home sales to jump by 11%[4].
The latest data from early January 2025 shows a surprising surge in home sales, with pending home sales up 5.1% compared to the same time in 2024, and mortgage applications on the rise. This early demand could be driven by stabilizing mortgage rates and positive job data[5].
In summary, the US housing industry is entering 2025 with challenges in affordability and a potential increase in seller activity. While high mortgage rates and inventory contraction are concerns, there are signs of improvement in new listings and pending home sales. The industry is closely watching these trends to understand how they will impact the market in the coming year.
Affordability remains a significant concern, with the typical mortgage payment for homebuyers starting 2025 at the highest level ever, at $2,290. This situation is exacerbated by high mortgage rates, which are expected to stay elevated in the sixes for most of the year. However, there is a possibility of rates dropping over 100 basis points if economic news improves and spreads tighten[1].
On the supply side, inventory continues to contract, with 651,000 single-family homes unsold on the market, 2.5% fewer than the previous week. However, this contraction is expected to reverse by February, with inventory increasing in most markets around the country. The Sun Belt markets have led inventory growth, but this disparity is expected to even out in 2025[1][2].
There are signs that seller volume is starting to return to normal levels. The last week of 2024 saw 32,500 new listings, 33% more than the same week in 2023. This increase in new listings could indicate that the shortage of sellers is finally abating[2].
Pending home sales are up 4.25% compared to the end of 2023, with 269,000 single-family homes under contract. This is a positive sign, but it is still 30% fewer than at the start of 2022 when the pandemic frenzy was still underway. The forecast for 2025 includes a 5% sales growth over 2024[1][2].
Price reductions are higher than in Q1 2024, with 36% of homes on the market having taken a price cut from the original list price. This indicates a slightly weaker supply-demand balance than a year ago. However, this number is expected to fall in the spring with fresh inventory and new buyers[1][2].
In contrast to the cautious outlook from HousingWire, Lawrence Yun, chief economist of the National Association of REALTORS, predicts a rosier forecast for 2025 and 2026, with an outlook for higher home sales and moderating mortgage rates. Yun forecasts existing home sales to rise 9% year-over-year in 2025 and new home sales to jump by 11%[4].
The latest data from early January 2025 shows a surprising surge in home sales, with pending home sales up 5.1% compared to the same time in 2024, and mortgage applications on the rise. This early demand could be driven by stabilizing mortgage rates and positive job data[5].
In summary, the US housing industry is entering 2025 with challenges in affordability and a potential increase in seller activity. While high mortgage rates and inventory contraction are concerns, there are signs of improvement in new listings and pending home sales. The industry is closely watching these trends to understand how they will impact the market in the coming year.