1. Rising home sales
Olsen said the housing market was slowly becoming “unstuck,” a trend that should continue as home prices rise at a “modest” pace.
The firm predicts that home prices will rise by 2.6% in 2025, while existing-home sales will notch 4.3 million, up from the 4 million sales it expects this year.
“While affordability challenges will remain, buyers should expect more homes on the market, meaning more time to consider their options and more leverage in negotiations,” Olsen said.
2. Choppy mortgage rates
Zillow predicted that mortgage rates would bounce throughout next year.
The firm pointed to recent changes in the 30-year fixed mortgage rate, which fell this year before climbing to nearly 7% as markets adjusted their expectations for borrowing costs amid sticky inflation and a robust economy.
“More swings like this are expected in 2025, with refinancing sprints occurring during the dips,” Olsen said.
3. A buyer’s market in the Southwest
Zillow’s data indicates most “buyer’s markets” in the US are in the Southeast. But it said buyers could find more opportunities in the Southwest next year as more inventory in the region becomes “unstuck” and attracts homebuyers.
“These buyer’s markets should have the greatest number of movers, while sellers will feel the heat of competition as buyers will have more homes to choose from,” Olsen said.
4. Smaller homes
Zillow predicted that small homes would continue to rise in popularity. The firm said the word “cozy” appeared in 35% more Zillow listings this year than last year, a sign that buyers could be more interested in downsizing to smaller and more affordable abodes.
“Home values of small condos are finally stabilizing after remote work left downtowns more empty, even while home value appreciation of larger properties — though much stronger — continues to soften,” Olsen said.
Source: Yahoo Finance
