I feel very optimistic that the year 2025 is going to be a great year for both buyers and sellers in the Real Estate Industry.

The median sale price for an existing home in the U.S. hit a record-high $426,900 in June 2024, according to NAR. While it has since dipped slightly, it remains higher than last year. These rising prices are likely to continue in 2025, but at a slower pace. CoreLogic predicts that home-to be a great appreciation will slow to an average growth of 2 percent for 2025, as compared to 4.5 percent growth in 2024, according to Hepp.

Markets with greater inventory are the ones most likely to see home prices drop, Hepp adds, while popular regions with less new inventory, particularly in the West and Northeast, will continue to see steady price increases. The top markets for price increases in the next year include Miami, Boston and Denver, CoreLogic forecasts. Markets that it predicts will be most susceptible to price decreases include Atlanta and Salt Lake City.

“Nevertheless, understanding the new reality of higher mortgage rates may help bring buyers off the sidelines who can no longer postpone their purchase and are ready and able to make the move,” says Hepp.

McBride agrees that, while overall prices are not likely to go down in 2025, they won’t rise quite as much: “Home-price appreciation will be particularly tepid, with many markets seeing little or no change in prices,” he says.

Still, you may be able to find a deal in specific instances, including with new homes. For instance, 31 percent of builders cut home prices in December, according to the NAHB, with an average price reduction of 5 percent. Along with that, 60 percent of builders offered sales incentives to buyers. (National Assoc. Realtors & National Assoc. Home Builders)

WILL MORTGAGE RATES GO DOWN?

The ESR Group’s (Economic Strategic Research) latest forecast sees mortgage rates closing in 2025 and 2026 at 6.5% and 6.3%, respectively, up from the previous forecast of 6.2% and 6.0%. Additionally, the ESR Group expects home price appreciation to decelerate to 3.5 percent in 2025, down from 5.8 percent in 2024.

Thought for the Day: Everyone needs someone to Love, Something to do and Something to look forward to.  

— Shirley SMITH RE/MAX Lake Country 706-453-6333