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Current Market Trends
The 2024 housing market is showing some signs of softening in certain areas, particularly around the Gulf area, which might lead to some month-over-month declines in the latter half of the year. However, despite these regional slowdowns, the national market is still expected to achieve its 13th consecutive year of positive growth by year-end.
Looking Ahead to 2025
According to the latest data from ResiClub, U.S. home prices are projected to rise by an average of +2.5% in 2025. Forecasts vary, with Goldman Sachs being the most optimistic, predicting a +4.4% increase. On the more cautious side, Moody’s predicts a modest +0.3% rise, suggesting a potential period of stagnation or “sideways movement” in prices due to stretched affordability and other economic factors.
Diverse Predictions and Factors
Goldman Sachs anticipates that home price growth will continue near the historical annual average of +4.5% observed from 1988 to 2023. They argue that a persistent lack of supply will keep pushing prices upward despite broader economic concerns. Meanwhile, Moody’s points to the affordability gap as a significant constraint on price growth, emphasizing that high prices relative to incomes could limit future increases.
Regional Variability
While the national forecast is positive, the actual outcome will likely vary by region. Some areas might see declines due to local market conditions, while others could experience above-average price appreciation. This variability underscores the importance of understanding local market dynamics alongside national trends.
Metrics to Watch
Moving forward, key indicators such as labor market health and inventory levels, particularly in vulnerable regions like Florida’s condo market, will be crucial in shaping the housing landscape. These factors will play a significant role in determining whether certain areas face price corrections or continue to grow. Utah has recently seen an uptick in homes listed for sale. We’re currently sitting at 3 months of supply and 3% unemployment.
If you have any questions about these forecasts or need further details about specific regional markets or zip codes, feel free to reach out.
Looking forward to our next conversation.
Here to serve,
