What To Expect from Mortgage Rates and Home Prices in 2025
What To Expect from Mortgage Rates and Home Prices in 2025 Curious about where the housing market is headed in 2025? The good news is that experts are offering some promising forecasts, especially when it comes to two key factors that directly affect your decisions: mortgage rates and home prices. Whether you're thinking of buying or selling, here’s a look at what the experts are saying and how it might impact your move. Mortgage Rates Are Forecast To Come Down One of the biggest factors likely affecting your plans is mortgage rates, and the forecast looks positive. After rising dramatically in recent years, experts project rates will ease slightly throughout the course of 2025 (see graph below): While that decline won’t be a straight line down, the overall trend should continue over the next year. Expect a few bumps along the way, because the trajectory of rates will depend on new economic data and inflation numbers as they’re released. But don’t get too hung up on those blips and reactions from the market as they happen. Focus on the bigger picture. Lower mortgage rates mean improving affordability. As rates come down, your monthly mortgage payment decreases, giving you more flexibility in what you can afford if you buy a home. This shift will likely bring more buyers and sellers back into the market, though. As Charlie Dougherty, Director and Senior Economist at Wells Fargo, explains: “Lower financing costs will likely boost demand by pulling affordability-crunched buyers off of the sidelines.” As that happens, both inventory and competition among buyers will ramp back up. The takeaway? You can get ahead of that competition now. Lean on your agent to make sure you understand how the shifts in rates are impacting demand in your area. Home Price Projections Show Modest Growth While mortgage rates are expected to come down slightly, home prices are forecast to rise—but at a much more moderate pace than the market has seen in recent years. Experts are saying home prices will grow by an average of about 2.5% nationally in 2025 (see graph below): This is far more manageable than the rapid price increases of previous years, which saw double-digit percentage growth in some markets. What’s behind this ongoing increase in prices? Again, it has to do with demand. As more buyers return to the market, demand will rise – but so will supply as sellers feel less rate-locked. More buyers in markets with inventory that’s still below the norm will put upward pressure on prices. But with more homes likely to be listed, supply will help keep price growth in check. This means that while prices will rise, they’ll do so at a healthier, more sustainable pace. Of course, these national trends may not reflect exactly what’s happening in your local market. Some areas might see faster price growth, while others could see slower gains. As Lance Lambert, Co-Founder of ResiClub, says: “Even if the average national home price forecast for 2025 is correct, it’s possible that some regional housing markets could see mild home price declines, while some markets could still see elevated appreciation. That has been, after all, the case this year.” Even the few markets that may see flat or slightly lower prices in 2025 have had so much appreciation in recent years – it may not have a big impact. That’s why it’s important to work with a local real estate expert who can give you a clear picture of what’s happening where you’re looking to buy or sell. Bottom Line With mortgage rates expected to ease and home prices projected to rise at a more moderate pace, 2025 is shaping up to be a more promising year for both buyers and sellers. If you have any questions about how these trends might impact your plans, let’s connect. That way you’ve got someone to help you navigate the market and make the most of the opportunities ahead.
Why Buying Now is Worth It: Breaking Down the Benefits of Homeownership in 2024
Why Buying Now is Worth It: Breaking Down the Benefits of Homeownership in 2024 As we enter the final quarter of 2024, many potential homebuyers find themselves at a crossroads—should they buy now or wait? While holding off and seeing if the market shifts is tempting, this infographic makes a compelling case for why buying now is a smart financial move. Experts Forecast Home Prices Will Continue to Rise The first key point from the infographic is the forecast for home price appreciation over the next five years. Even though price growth is expected to be more moderate than in recent years, the projections still indicate a steady increase. From 2024 to 2028, home prices are expected to rise year-over-year as follows: 2024: 4.73% 2025: 3.11% 2026: 3.29% 2027: 3.75% 2028: 3.88% This gradual increase highlights the importance of getting into the market now. The longer you wait, the more you could pay for the same home. Even at a slower growth rate, home prices are expected to climb significantly, which can benefit homeowners through increased equity. The Power of Equity: What You Stand to Gain One of the most powerful benefits of homeownership is the potential to build equity, and this infographic does a great job of illustrating just how much you could gain—or lose—depending on your timing. The forecasted price appreciation over the next five years means that if you buy a home valued at $450,000 today, you could see a potential increase in your home’s value by more than $90,000. This increase comes from the natural price growth in the market. By 2029, that same home could be worth approximately $540,957. That’s a substantial gain in equity—money that could be used for future investments, renovations, or retirement. The longer you wait, the more equity you miss out on, and that’s a significant opportunity cost. Don’t Miss Out: Why Waiting Could Cost You While waiting for the market to cool down potentially might seem like a good idea, the infographic emphasizes the risks of holding off. The projected steady rise in home prices means that, as time goes on, you could end up paying more for a similar home and missing out on the chance to build equity right away. If you're financially ready and able to buy, this data suggests that now is the time to act. Every month you wait could mean higher prices and a missed opportunity to start growing your wealth through homeownership. Key Takeaways: Home Prices Will Rise: Even with more moderate growth, prices are expected to steadily increase through 2028. Equity Gains Are Significant: Buying now could allow you to gain more than $90,000 in equity over the next five years. Delaying Can Be Costly: Waiting could result in paying more for a home and missing out on equity growth. Final Thoughts This infographic paints a clear picture: if you're on the fence about buying a home, now is the time to move. The market may seem intimidating, but the benefits of purchasing a home in 2024 far outweigh the risks of waiting. With prices projected to rise and equity opportunities increasing, buying a house now can set you on a path to financial growth and stability. If you’re ready to discuss your options and start your home-buying journey, reach out today. Let’s connect and help you start building wealth through real estate!
Why Did More People Decide To Sell Their Homes Recently?
Why Did More People Decide To Sell Their Homes Recently? Homeowners typically slow down their moving plans as the summer months wrap up, and as a result, fewer homes are listed for sale in the fall. It’s a predictable, seasonal trend in real estate. But this year, mortgage rates came down at the same time the number of homes on the market usually starts to decline. So, what happened? More homeowners decided to sell, so more homes came to the market. The most recent data from Realtor.com reveals that in September, the number of homes put up for sale increased by 11.6% compared to this time last year. As the green circle in the graph below shows, the typical September decline in homes coming to the market didn’t happen – that number actually went up (see graph below): Ralph McLaughlin, Senior Economist at Realtor.com, explains why there was an unseasonable rise: “This sharp increase is largely due to the decline in mortgage rates in mid-August, enticing homeowners to sell.” So, as rates came down at the end of the summer, more people jumped into the market and decided to make their move. What Does This Mean If You’re Looking To Buy a Home? It means more fresh options to choose from than you’ve had in a while – not the ones that have been sitting around, unsold. But keep in mind, mortgage rates have been volatile lately, ticking up slightly in recent weeks, which could limit the number of people who feel comfortable with the idea of selling in the months ahead. And in this market, it’s mortgage rates that are largely driving homeowner decisions. Why Buy Now, Rather Than Wait? Whether you're looking for a starter home, an upgrade, or hoping to downsize, you have more homes to choose from right now. And if you can find what you’re looking for, know that these new, fresh options won’t be on the market forever. So, staying on top of what’s available in your local area with a trusted agent is key. And remember, one month doesn’t make a trend. So, what does that mean going forward? Whether more homeowners than normal continue to put their houses on the market will largely depend on what happens with mortgage rates and the economic factors that impact them, like inflation, employment, and the reactions by the Federal Reserve. With that in mind, now might be your moment, while more homes are available – if you’re ready, willing, and able to buy this fall. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains: “The rise in inventory – and, more technically, the accompanying months’ supply – implies home buyers are in a much-improved position to find the right home and at more favorable prices.” Bottom Line As rates came down at the end of the summer, sellers started to trickle back into the market, which means buyers have more choices right now. Let’s connect to make sure you have a trusted advisor to help you navigate the new options before they’re all scooped up.
The Benefits of Using Your Equity To Make a Bigger Down Payment
The Benefits of Using Your Equity To Make a Bigger Down Payment Did you know? Homeowners are often able to put more money down when they buy their next home. That’s because, once they sell, they can use the equity they have in their current house toward their next down payment. And it’s why as home equity reaches a new height, the median down payment has too. According to the latest data from Redfin, the typical down payment for U.S. homebuyers is $67,500—that’s nearly 15% more than last year, and the highest on record (see graph below): Here’s why equity makes this possible. Over the past five years, home prices have increased significantly, which has led to a big boost in equity for current homeowners like you. When you sell your house and move, you can take the equity that gives you and apply it toward a larger down payment on your new home. That’s a major opportunity, especially if you’ve had concerns about affordability. Now, it’s important to remember you don’t have to make a big down payment to buy your next home—there are loan programs that let you put as little as 3%, or even 0% down. But there’s a reason so many current homeowners are opting to put more money down. That’s because it comes with some serious perks. Why a Bigger Down Payment Can Be a Game Changer 1. You’ll Borrow Less and Save More in the Long Run When you use your equity to make a bigger down payment on your next home, you won’t have to borrow as much. And the less you borrow, the less you’ll pay in interest over the life of your loan. That’s money saved in your pocket for years to come. 2. You Could Get a Lower Mortgage Rate Providing a larger down payment shows your lender you’re more financially stable and not a large credit risk. The more confident your lender is in your credit score and your ability to pay your loan, the lower the mortgage rate they’ll likely be willing to give you. And that amplifies your savings. 3. Your Monthly Payments Could Be Lower A bigger down payment doesn’t just help you reduce how much you have to borrow—it also means your monthly mortgage payment may be smaller. That can make your next home more affordable and give you a bit more breathing room in your budget. 4. You Can Skip Private Mortgage Insurance (PMI) If you can put down 20% or more, you can avoid Private Mortgage Insurance (PMI), which is an added cost many buyers have to pay if their down payment isn’t as large. Freddie Mac explains it like this: “For homeowners who put less than 20% down, Private Mortgage Insurance or PMI is an added insurance policy for homeowners that protects the lender if you are unable to pay your mortgage. It is not the same thing as homeowner's insurance. It's a monthly fee, rolled into your mortgage payment, that’s required if you make a down payment less than 20%.” Avoiding PMI means you’ll have one less expense to worry about each month, which is a nice bonus. Bottom Line Down payments are at a record high, largely because recent equity gains are putting homeowners in a position to put more money down. If you’re thinking about selling your current house and moving, let’s work together to figure out how much home equity you have right now, and how it can boost your buying power in today’s market.
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