What Mortgage Professionals Can Expect from the 2025 Housing Market

Original Source:  NAR

The housing market has faced some tough years recently, but there’s good news on the horizon for 2025. According to Lawrence Yun, Chief Economist of the National Association of REALTORS® (NAR), the worst of the market downturn may be behind us. As we look toward 2025, Yun and other experts are predicting a shift in home sales, mortgage rates, and buyer trends. For mortgage professionals, it’s important to understand these changes to stay ahead of the curve.

At Innovative Mortgage Services, Inc., we’re dedicated to keeping you informed about the latest housing market insights to help you thrive in an evolving market. Here's a breakdown of what to expect in 2025 and beyond, including opportunities to capitalize on emerging trends.

Home Sales Set to Increase in 2025

After a challenging couple of years, the housing market is showing signs of recovery. With improving job numbers and a more stable economy, Lawrence Yun forecasts a rise in home sales for 2025 and 2026.

• 2025 Home Sales Outlook: Existing home sales are expected to increase by 9%, while new home sales could see an 11% jump.
• 2026 Projections: Home sales are expected to continue rising, with a 13% increase in existing home sales and an 8% increase in new home sales.

With more inventory becoming available and a growing population, the stage is set for more Americans to make their next move in real estate.

Mortgage Rates: A More Stable Future

Mortgage rates have been volatile over the past couple of years, but there's hope for moderation in 2025. While rates are unlikely to drop dramatically, Yun expects mortgage rates to stabilize at the lower end of their recent range. This could make home buying more accessible for many potential buyers.

Recent actions by the Federal Reserve, including interest rate cuts, could help ease mortgage rates further, though the impact on mortgage rates may not be immediate. Homeowners who are “locked-in” with historically low mortgage rates from previous years may gradually begin to consider moving, as the pressure to stay put eases.

Home Prices: Modest Increases Ahead

Home prices have soared in recent years, but experts predict more modest price increases moving forward. Yun predicts the median home price in 2025 will rise by 2%, reaching approximately $410,700. By 2026, prices could climb another 2%, bringing the median price to $420,000.

This slower pace of growth will allow home prices to remain more in line with wages, making homeownership more attainable for many buyers. However, affordability challenges may still persist for some buyers, especially in high-demand markets.

Shifting Buyer Demographics

The profile of today’s homebuyers is changing. NAR’s latest data reveals several key trends that will shape the housing market in the coming years.

1. All-Cash Buyers Surge: With the rise in home equity, more buyers are paying cash for their homes. In fact, 26% of home sales in the past year were all-cash purchases, and this trend is expected to continue.
2. Older First-Time Buyers: The median age of a first-time homebuyer has risen to 38—the highest ever recorded. Many are relying on financial help from family or using funds from assets like stocks or cryptocurrency.
3. Multigenerational Homes: The trend toward multigenerational living is growing, as 17% of homebuyers are purchasing homes with multiple generations under one roof. Cost savings and caregiving are two of the main drivers behind this shift.
4. Urban Areas Gaining Popularity: While the pandemic sparked a move toward suburban living, many buyers are now returning to city centers, marking the largest urban growth in a decade.
5. Single Women Lead the Way: Single women continue to outpace single men in home purchases, holding a 24% share of the home-buying market compared to just 11% for single men.

These demographic shifts offer new opportunities for mortgage professionals to cater to a broader range of buyers.

Get Ready for 2025 with Innovative Mortgage Services, Inc.

The 2025 housing market promises to bring growth and change. Mortgage professionals understanding these emerging trends is key to making informed decisions. At Innovative Mortgage Services, Inc., we offer competitive compensation plans that can help you grow your career and thrive in the evolving housing market. Check out our compensation plans and learn how you can benefit from being part of our team.

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