The housing market is shaping up for some interesting changes. Although no one has a crystal ball, experts are sharing predictions about what could happen.
Here are the key factors that will influence the housing market in 2025, according to experts.
Home Prices
Kori Sassower, founder and principal agent at The Kori Sassower Team, said that in suburban areas, low inventory levels will keep prices high due to the combination of low supply and high demand. She also explained that in the cities, a slight rebound in prices is expected because tight inventory will encourage people to remain in urban areas longer.
“Additionally, strong bonuses and a profitable year on Wall Street will attract more buyers in the luxury market, leading to an increase in pied-à-terre sales in the cities,” she continued. “However, areas significantly impacted by climate change, which have seen rising insurance premiums, are likely to experience a decrease in prices as buyers are deterred from making those risky investments.”
Home Inventory
Sassower predicted that 2025 is going to have even less inventory than 2024.
“The competition will be fierce with multiple offer situations in coveted suburbs across the country,” she said. “People are living in their homes longer and there is not enough supply for first-time home buyers. If interest rates go below 5.5% (which we do not expect) this could open up some opportunities, but I do not expect that to happen in 2025.”
Buyer Trends
“Buyers have become more flexible in their home search,” said Sassower. “Previously, they were focused on specific towns. But with low inventory, they have broadened their areas of interest. Many buyers who once wanted move-in-ready homes are now open to making improvements if they find a property in a desirable location.”
Home Trends
Sassower said that regarding home trends, pools have become less important compared to their significance during the pandemic. She also added that buyers are showing a preference for more formal spaces and are also looking for open-concept designs with some limitations.
“For example, they often want kitchens that open to the family room while still maintaining separate formal living and dining areas,” she explained. “Additionally, home offices have continued to be a must-have feature.”
