The housing market in 2025 could see some growth, but much will depend on what happens with mortgage rates.
After a bumpy ride with rates in 2024, Zillow predicts that mortgage rates will slowly decline next year, which could help home sales and prices rise a bit.
In 2024, home sales were a bit stronger than expected, with an estimated 4.06 million homes sold.
This is expected to increase to 4.16 million sales in 2025. Home prices should grow by 2.2% over the year, which is similar to the 2.3% growth seen in November 2024.
New listings of homes for sale are still lower than before the pandemic, but they’re improving.
For example, new listings are down about 14% compared to pre-pandemic levels, but that’s much better than the 25% drop seen earlier in the year.
What Buyers Can Expect This Winter
As we move into winter, homebuyers might find it easier to make a deal.
Competition has dropped, which means fewer bidding wars and a better chance to negotiate.
For buyers, this could mean fewer homes selling for more than the asking price and more opportunities to ask for inspections or repairs before buying.
Home Prices Across the U.S.
- The typical home in the U.S. is worth $358,761.
- Monthly mortgage payments, assuming a 20% down payment, are around $1,865, down 3.8% from last year but still much higher than before the pandemic.
- Home values went up in San Jose, while places like Austin, Tampa, and Dallas saw slight drops.
Inventory and Listings
- New listings were down 21.6% in November compared to the month before, but up 0.6% compared to last year.
- Total inventory (the number of homes available) was down 6.3% from the previous month and 26.3% lower than pre-pandemic levels.
- Homes are taking a little longer to sell, with the typical home listed for 70 days before going under contract.
Price Cuts and Sales Above List Price
- 21.8% of listings in November had a price cut, a small decrease from the month before.
- About 27.8% of homes sold for more than the asking price in November, down from the previous month.
Market Heat Index
- Zillow’s market heat index shows a neutral market overall, with the best seller’s markets in San Jose, Hartford, Buffalo, New York, and Boston.
- The best buyer’s markets right now are New Orleans, Miami, Jacksonville, Indianapolis, and Louisville.
Summary Table:
| Category | November 2024 Data |
|---|---|
| Home Value | $358,761 |
| Mortgage Payment | $1,865 (down 3.8% from last year) |
| New Listings (monthly) | -21.6% (compared to last month) |
| Inventory | -6.3% (compared to last month) |
| Price Cuts | 21.8% of listings had cuts |
| Homes Sold Above List | 27.8% of homes sold above list |
| Market Heat Index | Neutral |
If mortgage rates continue to drop, 2025 could bring a more balanced market with a little more opportunity for buyers and steady price growth.