Ia a Buyer’s Market Shaping Up in 2025?

Time passes and with each political, economic and business trend, the housing market is impacted.

From Florida to Dallas to Denver and Los Angeles, we’re seeing a big growth in home listings. It’s giving optimism to buyers about their dream to own a home and begin accumulating personal wealth. A few cities have shown price decreases, but buyers seem to be rejecting those cities and moving elsewhere.

So while listings rise, it’s far from a buyers market across the US.  Sellers are demanding their price. In the south, a buyer’s market is crystalizing but it may not last. And in the Northeast, a sellers market is intensifying. Homeowners with large mortgages are in a bind with mortgage refinancing deadlines looming and have to face up to a sale of their home.

NAR and Corelogic Market Predictions

NAR’s revised forecast of the median home price in 2025 is to rise $410,700, up 2% vs from 2024. They predict existing home sales will increase 7–12% and new home sales will grow 11%. Will mortgage rates fall to let this happen?

So is a seller’s/buyer’s market question even relevant? Will the national growth trend in housing market overwrite local price trends? Or will the slide in the south pick up steam in 2025?

The CoreLogic HPI Forecast predicts home prices will rise 3.8% during the November 2024 to November 2025 period. They report home prices rose $10,000 last month.

The Appalachia region is the hottest.  Wheeling, WV and Ohio area; Johnstown, PA; and the Huntington-Ashland metropolitan area within Kentucky, Ohio and West Virginia all saw year-over-year price growth jumps, increasing by 20%, 16%, and 14.8%, respectively.

No state posted an annual home price decline in November. States with the highest increases year over year were New Jersey (+7.8%) and Rhode Island (+7.3%). But states aside, prices vary by cities — those that are currently attractive for jobs and economic growth.

Mortgage Rates Might Not Retreat

Because mortgage rates haven’t come down, and could potential rise again this year. The inconceivable stagflation scenario is in view, and with prices and rates so high, buyers continue to be priced out of the market.  A buyers market, but buyers are incapacitated. Housing is unaffordable and in limited supply.

After President Trump’s election, few thought the housing market would be impacted. It’s the same old refrain, few houses for sale, low construction, and a high cost/high tax building environment.  President Trump has been talking about construction and zoning deregulation, lower income taxes and reduced Salt tax reductions, but his talk of high tariffs is the most significant issue right now. It’s wiping out all his other initiatives.

The import tariffs will definitely hit the construction industry, and set America’s housing market back in terms of affordability.  Tariffs will raise inflation which makes banks raise mortgage rates. His actions threaten the future of housing. While well-meaning in protecting American economic interests, it’s a case of the income President trying to do too much in a frenzy, which ultimately could defeat his administration.

The fear in this political turmoil will keep many buyers out of the market while some will dive in with massive mortgages.

Higher For Longer Mortgage Rates Hurt the Entire Industry

Higher mortgage rates, reduced building material supply, higher inflation, continued locked-in effect, and increased fear all conspire to lower the outlook for the US housing market. If you read the latest Florida housing market report or California housing market reports, home prices don’t respond to supply or demand.  They’re just high.

What is a Buyer’s Market?

Technically, a buyers market is when there are more sellers and those wanting to buy. A sellers market is the reverse of course, where there are few listings for the many who want to buy. But that’s technical. In reality, a buyers market can happen like it is in the South. And in the north, a limited supply is making it a seller’s market.

Boston saw a 3% home price increase from last year and large houses are up significantly (7% to 12%). Average home prices has reached $823,796.  Housing supply is down 16% with 3 bedroom homes for sale down 21% vs December 2024. The work from home trend is disappearing and those returning to cities face much higher housing costs in cities such as Boston or New York.

Why is this a Sellers Market Again in the Northeast?

• few affordable homes for sale and few being built
• builders aren’t able to build due to costs, development fees, land cost, and construction regulations
• homeowners are too uncertain to sell with nowhere to go
• seniors don’t want to sell their houses and intend to stay in their neighbors with friends/amenities/families
• there are millions of buyers including eager, determined Millennials starting families who need to buy
• millions of renters are always interested in buying but would struggle to qualify for a mortgage
• economy is improving and demand for homes will rise

Inflation’s Going to Bring it All Crashing Down Right?

The specter of higher for longer interest rates is gaining strength.  While the hope is for lower rates, a strong economy and the lagging effects of the Democrat’s economic suppression (regulation/taxes) and stimulus spending is not going away quickly. Additional wealth creation at a time when supply is still constrained (with supply chains facing tariffs) surely means inflation.

As we enter the Trump 2.0 period and see the US economy grow, we’re likely to move to a sellers markeplace particularly in the East where supply is challenged.

See the latest housing market predictions.