Thinking about making a move in 2025 and wondering what you can expect? Here’s what expert forecasts say lies ahead.
Luxury living is about more than just stunning views and cutting-edge smart home technology—it's about elevating your lifestyle. And if you're in the market for a million-dollar home, now is an excellent time to explore the thriving luxury market. Here's why.
The top of the market, or luxury homes, can mean different things depending on where you live. But in general, these are homes that are in the top 5% price range in any area. According to a recent report from Redfin, the average value of those homes has risen to over one million dollars:
“The median sale price for U.S. luxury homes, defined as the top 5% of listings, rose 9% year-over-year to a record $1.18 million during the second quarter.”
That same report goes on to show the percentage of homes valued at a million dollars or more has risen to an all-time high (see graph below):
That means, if this is your desired price range, you have options to choose from, each with different features and styles.
Whether you're looking for the latest designs, like modern kitchens with high-end appliances, exclusive amenities, or enhanced privacy and security, the market that fits this lifestyle is growing.
In addition, a luxury home could help you build significant long-term wealth. As the Redfin quote mentioned earlier says, luxury home prices are rising. That may be the reason there are a lot of people investing in luxury real estate right now. According to the August Luxury Market Report:
“By the end of July, the overall growth in the volume of sales in 2024 stood at 14.82% for single-family homes and 11.35% for attached homes compared to the same period in 2023.”
With more million-dollar homes on the market and prices going up, you have luxury options to choose from and a chance to build significant long-term wealth. Want to see the best homes in your area? Get in touch with a local real estate agent today.
Now that it’s September, all eyes are on the Federal Reserve (the Fed). The overwhelming expectation is that they’ll cut the Federal Funds Rate at their upcoming meeting, driven primarily by recent signs that inflation is cooling, and the job market is slowing down. Mark Zandi, Chief Economist at Moody’s Analytics, said:
“They’re ready to cut, just as long as we don’t get an inflation surprise between now and September, which we won’t.”
But what does this mean for the housing market, and more importantly, for you as a potential homebuyer or seller?
The Federal Funds Rate is one of the key factors that influences mortgage rates – things like the economy, geopolitical uncertainty, and more also have an impact.
When the Fed cuts the Federal Funds Rate, it signals what’s happening in the broader economy, and mortgage rates tend to respond. While a single rate cut might not lead to a dramatic drop in mortgage rates, it could contribute to the gradual decline that’s already happening.
As Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), points out:
“Once the Fed kicks off a rate-cutting cycle, we do expect that mortgage rates will move somewhat lower.”
And any upcoming Federal Funds Rate cut likely won’t be a one-time event. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“Generally, the rate-cutting cycle is not one-and-done. Six to eight rounds of rate cuts all through 2025 look likely.”
Here’s what experts in the industry project for mortgage rates through 2025. One contributing factor to this ongoing gradual decline is the anticipated cuts from the Fed. The graph below shows the latest forecasts from Fannie Mae, MBA, NAR, and Wells Fargo (see graph below):
So, with recent improvements in inflation and signs of a cooling job market, a Federal Funds Rate cut is likely to lead to a moderate decline in mortgage rates (shown in the dotted lines). Here are two big reasons why that’s good news for both buyers and sellers:
1. It Helps Alleviate the Lock-In Effect
For current homeowners, lower mortgage rates could help ease the lock-in effect. That’s where people feel stuck within their current home because today’s rates are higher than what they locked in when they bought their current house.
If the fear of losing your low-rate mortgage and facing higher costs has kept you out of the market, a slight reduction in rates could make selling a bit more attractive again. However, this isn’t expected to bring a flood of sellers to the market, as many homeowners may still be cautious about giving up their existing mortgage rate.
2. It Should Boost Buyer Activity
For potential homebuyers, any drop in mortgage rates will provide a more inviting housing market. Lower mortgage rates can reduce the overall cost of homeownership, making it more feasible for you if you’ve been waiting to make a move.
While a Federal Funds Rate cut is not expected to lead to drastically lower mortgage rates, it will likely contribute to the gradual decrease that’s already happening.
And while the anticipated rate cut represents a positive shift for the future of the housing market, it’s important to consider your options right now. Jacob Channel, Senior Economist at LendingTree, sums it up well:
“Timing the market is basically impossible. If you’re always waiting for perfect market conditions, you’re going to be waiting forever. Buy now only if it’s a good idea for you.”
The expected Federal Funds Rate cut, driven by improving inflation and slower job growth, is likely to have a positive, albeit gradual, impact on mortgage rates. That could help unlock opportunities for you. When you’re ready, connect with a local real estate agent so you’re prepared to take action.
Are you on the fence about whether to sell your house now or hold off? It’s a common dilemma, but here’s a key point to consider: your lifestyle might be the biggest factor in your decision. While financial aspects are important, sometimes the personal motivations for moving are reason enough to make the leap sooner rather than later.
An annual report from the National Association of Realtors (NAR) offers insight into why homeowners like you chose to sell. All of the top reasons are related to life changes. As the graph below highlights:
As the visual shows, the biggest motivators were the desire to be closer to friends or family, outgrowing their current house, or experiencing a significant life change like getting married or having a baby. The need to downsize or relocate for work also made the list.
If you, like the homeowners in this report, find yourself needing features, space, or amenities your current home just can’t provide, it may be time to consider talking to a real estate agent about selling your house. Your needs matter. That agent will walk you through your options and what you can expect from today’s market, so you can make a confident decision based on what matters most to you and your loved ones.
Your agent will also be able to help you understand how much equity you have and how it can make moving to meet your changing needs that much easier. As Danielle Hale, Chief Economist at Realtor.com, explains:
“A consideration today's homeowners should review is what their home equity picture looks like. With the typical home listing price up 40% from just five years ago, many home sellers are sitting on a healthy equity cushion. This means they are likely to walk away from a home sale with proceeds that they can use to offset the amount of borrowing needed for their next home purchase.”
Your lifestyle needs may be enough to motivate you to make a change. If you want help weighing the pros and cons of selling your house, connect with a local real estate professional today.
If you’re thinking about downsizing, you may be hearing about 55+ communities and wondering if they’d be a good fit for you. Here’s some information that could help you make your decision.
It’s important to note that these communities aren’t just for people who need extra support – they can be pretty vibrant, too. Many people who are downsizing opt for this type of home because they’re looking to be surrounded by people in a similar season of life. U.S. News explains:
“The terms ‘55-plus community,’ ‘active adult community,’ ‘lifestyle communities’ and ‘planned communities’ refer to a setting that caters to the needs and preferences of adults over the age of 55. These communities are designed for seniors who are able to care for themselves but may be looking to downsize to a community with others their same age and with similar interests.”
If that sounds like something that may interest you, here's one thing to consider. You may find you’ve got a growing list of options if you look at this type of community. According to 55places.com, the number of listings tailored for homebuyers in this age group has increased by over 50% compared to last year.
And a bigger pool of options could make your move much less stressful because it’s easier to find something that’s specifically designed to meet your needs.
On top of that, there are other benefits to seeking out this type of home. An article from 55places.com, highlights just a few:
If this sounds appealing to you, reach out to a local real estate agent. They’ll be able to walk you through what’s available in your area and the unique amenities for each community. You may find a 55+ home is exactly what you’ve been searching for.
If you’ve been keeping an eye on the housing market over the past couple of years, you know sellers have had the upper hand. But is that going to shift now that inventory is growing? Here’s a breakdown of what you need to know.
A balanced market is generally defined as a market with about a five-to-seven-month supply of homes available for sale. In this type of market, neither buyers nor sellers have a clear advantage. Prices tend to stabilize, and there’s a healthier number of homes to choose from. And after many years when sellers had all the leverage, a more balanced market would be a welcome sight for people looking to move. The question is – is that really where the market is headed?
After starting the year with a three-month supply of homes nationally, inventory has increased to four months. That may not sound like a lot, but it means the market is getting closer to balanced – even though it’s not quite there yet. It’s important to note this increase in inventory is not leading to an oversupply that would cause a crash. Even with the growth lately, there’s still nowhere near enough supply for that to happen.
The graph below uses data from the National Association of Realtors (NAR) to give you an idea of where inventory has been in the past, and where it’s at today:
For now, this is still seller’s market territory – it’s just not as frenzied of a seller’s market as it’s been over the past few years. As Mark Fleming, Chief Economist at First American, says:
“The faster housing supply increases, the more affordability improves and the strength of a seller’s market wanes.”
Here's how this shift impacts you and the market conditions you'll face when you move. Lawrence Yun, Chief Economist at NAR, explains:
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
The graphs below use the latest data from NAR and Realtor.com to help show examples of these changes:
Homes Are Sitting on the Market Longer: Since more homes are on the market, they’re not selling quite as fast. For buyers, this means you may have more time to find the right home. For sellers, it’s important to price your house right if you want it to sell. If you don’t, buyers might choose better-priced options.
Sellers Are Receiving Fewer Offers: As a seller, you might need to be more flexible and willing to compromise on price or terms to close the deal. For buyers, you could start to face less intense competition since you have more options to choose from.
Fewer Buyers Are Waiving Inspections: As a buyer, you have more negotiation power now. And that’s why fewer buyers are waiving inspections. For sellers, this means you need to be ready to negotiate and address repair requests to keep the sale moving forward.
But this is just the national picture. The type of market you’re in is going to vary a lot based on how much inventory is available. So, lean on a local real estate agent for insight into how your area stacks up.
Whether you’re buying or selling, understanding how the market is changing gives you a big advantage. Your agent has the latest data and local insights, so you know exactly what’s happening and how to navigate it.
The real estate market is always changing, and it’s important to stay informed. Whether you’re buying or selling, understanding this shift toward a balanced market can help. If you have any questions or need expert advice, don’t hesitate to reach out to a local real estate agent.
Looking ahead to 2025, it's important to know what experts are projecting for the housing market. And whether you're thinking of buying or selling a home next year, having a clear picture of what they’re calling for can help you make the best possible decision for your homeownership plans.
Here’s an early look at the most recent projections on mortgage rates, home sales, and prices for 2025.
Mortgage rates play a significant role in the housing market. The forecasts for 2025 from Fannie Mae, the Mortgage Bankers Association (MBA), the National Association of Realtors (NAR), and Wells Fargo show an expected gradual decline in mortgage rates over the course of the next year (see chart below):
Mortgage rates are projected to come down because continued easing of inflation and a slight rise in unemployment rates are key signs of a strong but slowing economy. And many experts believe these signs will encourage the Federal Reserve to lower the Federal Funds Rate, which tends to lead to lower mortgage rates. As Morgan Stanley says:
“With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly.”
The market will see an increase in both the supply of available homes on the market, as well as a rise in demand, as more buyers and sellers who have been sitting on the sidelines because of higher rates choose to make a move. That’s one big reason why experts are projecting an increase in home sales next year.
According to Fannie Mae, MBA, and NAR, total home sales are forecast to climb slightly, with an average of about 5.4 million homes expected to sell in 2025 (see graph below):
That would represent a modest uptick from the lower sales numbers in 2023 and 2024. For reference, about 4.8 million total homes were sold in 2023, and expectations are for around 4.5 million homes to sell this year.
While slightly lower mortgage rates are not expected to bring a flood of buyers and sellers back to the market, they certainly will get more people moving. That means more homes available for sale – and competition among buyers who want to purchase them.
More buyers ready to jump into the market will put continued upward pressure on prices. Take a look at the latest price forecasts from 10 of the most trusted sources in real estate (see graph below):
On average, experts forecast home prices will rise nationally by about 2.6% next year. But as you can see, there’s a range of opinions on how much prices will climb. Experts agree, however, that home prices will continue to increase moderately next year at a slower, more normal rate. But keep in mind, prices will always vary by local market.
Understanding 2025 housing market forecasts can help you plan your next move. Whether you're buying or selling, staying informed about these trends will ensure you make the best decision possible. Reach out to a trusted real estate agent to discuss how these forecasts could impact your plans.
It’s no surprise that the upcoming Presidential election might have you speculating about what’s ahead. And those unanswered thoughts can quickly spiral, causing fear and uncertainty to swirl through your mind. So, if you’ve been considering buying or selling a home this year, you’re probably curious about what the election might mean for the housing market – and if it’s still a good time to make your move.
Here’s the good news that may surprise you: typically, Presidential elections have only had a small, temporary impact on the housing market. But your questions are definitely worth answering, so you don’t have to pause your plans in the meantime.
Here’s a look at decades of data that shows exactly what’s happened to home sales, prices, and mortgage rates in previous Presidential election cycles, so you can move forward with the facts as you weigh the pros and cons of your homeownership decision.
In the month leading up to a Presidential election, from October to November, there’s typically a slight slowdown in home sales (see graph below):
Some consumers will simply wait it out before they make their purchase decision. However, it’s important to know this slowdown is small and temporary.
Historically, home sales bounce right back and continue to rise the following year.
In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows after 9 of the last 11 Presidential elections, home sales went up the year after the election, and it’s been happening consistently since the early 1990s (see chart below):
Home PricesYou may also be wondering about home prices. Do prices come down during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist notes:
“An election year doesn’t alter the price trend that is already happening in the market.”
Home prices generally rise over time, regardless of an election cycle. So, based on what history shows, you can expect the current pricing trend in your local market to likely continue, barring any unusual market or economic circumstances.
The latest data from NAR reveals that after 7 of the last 8 Presidential elections, home prices increased the following year (see chart below):
The one outlier was from 2008 to 2009, which was during the height of the housing market crash. That was certainly not a typical year. Today’s market, however, is much more resilient. And while prices are moderating nationally, they aren’t on an overall decline.
And the third thing that’s likely on your mind is mortgage rates, since they impact your monthly payment if you’re financing a home. Looking at the last 11 Presidential election years, data from Freddie Mac shows mortgage rates decreased from July to November in 8 of them (see chart below):
And this year, we’ve already started to see that happen. Most experts also forecast mortgage rates will ease slightly throughout the rest of 2024. If that happens – and all signs right now indicate it should – this year will continue to follow the trend of declining rates. So, if you’re looking to buy a home in the coming months, this could be great news for your purchasing power.
What’s the big takeaway? While Presidential elections do have some impact on the housing market, the effects are usually minimal. As Lisa Sturtevant, Chief Economist at Bright MLS, says:
“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”
For most buyers and sellers, elections don’t have a major impact on their plans.
While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. And this means you don’t have to pause your plans in the meantime. For help navigating the market during this election cycle, reach out to a local real estate agent.
You won’t find anyone who’s going to argue that mortgage rates have had a big impact on housing affordability over the past couple of years. But there is hope on the horizon. Rates have actually started to come down. And, recently they hit the lowest point we’ve seen in 2024, according to Freddie Mac (see graph below):
And if you’re thinking about buying a home, that may leave you wondering: how much lower are they going to go? Here’s some information that can help you know what to expect.
Experts say the overall downward trend should continue as long as inflation and the economy keeps cooling. But as new reports come out on those key indicators, there’s going to be some volatility here and there.
What you need to remember is it’s not wise to let those blips distract you from the larger trend. Rates are still down roughly a full percentage point from the recent peak compared to May.
And the general consensus is that rates in the low 6s are possible in the months ahead, it just depends on what happens with the economy and what the Federal Reserve decides to do moving forward.
Most experts are already starting to revise their 2024 mortgage rate forecasts to be more optimistic that lower rates are ahead. For example, Realtor.com says:
“Mortgage rates have been revised slightly lower as signals from the economy suggest that it will be appropriate for the Fed to begin to cut its Federal Funds rate in 2024. Our yearly mortgage rate average forecast is down to 6.7%, and we revised our year-end forecast to 6.3% from 6.5%.”
So, what does this mean for you and your plans to move? If you’ve been holding out and waiting for rates to come down, know that it’s already happening. You just have to decide, based on the expert projections and your own budget, when you’ll be willing to jump back in. As Sam Khater, Chief Economist at Freddie Mac, says:
“The decline in mortgage rates does increase prospective homebuyers’ purchasing power and should begin to pique their interest in making a move.”
As a next step, ask yourself this: what number do I want to see rates hit before I’m ready to move?
Maybe it’s 6.25%. Maybe it’s 6.0%. Or maybe it’s once they hit 5.99%. The exact percentage where you feel comfortable kicking off your search again is personal. Once you have that number in mind, you don’t need to follow rates yourself and wait for it to become a reality.
Instead, connect with a local real estate professional. They’ll help you stay up to date on what’s happening and have a conversation about when to make your move. And once rates hit your target, they’ll be the first to let you know.
If you’ve put your moving plans on hold because of higher mortgage rates, think about the number you want to see rates hit that would make you re-enter the market.
Once you have that number in mind, connect with a real estate professional so you have someone on your side to let you know when we get there.
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