Optimism abounds for a bigger housing turnaround in the new year. The housing market could open up more opportunities to home buyers in 2025 and lead to a housing rebound after two years of sluggish sales, housing economists said in December during the National Association of Realtors Real Estate Forecast Summit.
“Home buyers will have more success next year,” said Lawrence Yun, NAR’s chief economist. “The worst of the affordability challenges are over as more inventory, stable mortgage rates and continued job and incoming growth pave the way for more Americans to achieve homeownership.”
NAR research shows that if mortgage rates fall to 6%—as NAR predicts they likely will in 2025—homeownership could be made more affordable to about 6.2 million more prospective buyers than when rates were near 7%.
Also optimistic are home builders. According to the latest National Association of Home Builders/Wells Fargo Housing Market builder sentiment index, home builders’ future sales expectations climb near a three-year high. New construction single-family homes came in at a 7% year-over-year increase in November, based on a Commerce Department report.
However, with a slow-down in sales for much of 2024, some builders are having to cut home prices and offer sales incentives to clear standing inventory: 31% of builders cut their home prices in November, with the average price reduction being 5%, and 60% of home builders reported using sales incentives, such as covering closing costs and/or buying down mortgage rates.
Look for a Worcester County “year in review” home sales recap next week.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
