Blog posted date Feb 19,2025
By Don Almeida- Mortgage Expert and President of Happy Home Mortgage
The U.S. housing market is on track for steady growth in 2025, with home prices expected to rise by 4.1%, according to CoreLogic’s Home Price Index (HPI) forecast. Despite minor fluctuations in late 2024, this projection reflects a resilient and stable market, offering both buyers and sellers opportunities in the coming year.
December 2024 saw national home prices rise 3.4% compared to the previous year, with the Northeast leading the way. States like Connecticut and New Jersey experienced impressive year-over-year gains of 7.8% and 7.7%, respectively. While some areas, such as Hawaii and the District of Columbia, saw slight price declines, the overall trend points to continued appreciation and a healthy real estate landscape.
Another positive development is the increase in housing supply. With more homes coming onto the market, buyers will have additional options, helping to create a more balanced environment. The median sales price for single-family homes reached $390,000 in December 2024, reflecting sustained demand and market confidence.
Looking ahead, key metro areas are expected to perform well, with many regions benefiting from steady economic growth and strong local demand. While affordability remains a challenge for some buyers, mortgage rates are projected to stabilize, creating more predictability for home shoppers. Realtor.com forecasts an average mortgage rate of 6.3% in 2025, a slight improvement from 2024’s 6.7%, which could encourage more buyers to enter the market. Additionally, the supply of homes for sale is expected to increase by 11.7%, giving buyers more choices.
New-home construction is also gaining momentum, with an estimated 1.1 million new units expected to be built in 2025. This expansion will contribute to a more dynamic market and help meet demand in growing areas. While some regions may experience slower growth, the overall trajectory remains positive, providing ample opportunities for both homebuyers and investors.
As we move into 2025, the real estate market remains a bright spot in the economy. With home values expected to rise, inventory improving, and mortgage rates showing signs of stability, buyers and sellers alike can look forward to a year of opportunity and growth.
Sources:
- CoreLogic: US Home Price Insights – February 2025
- Fannie Mae: Housing Market Unlikely to Thaw in 2025 Due to Affordability Challenges and ‘Lock-in Effect’
- New York Post: House hunters won’t see relief any time soon – mortgage rates set to stay sky high
