What to anticipate from the first quarter of 2025's housing market trends
What to expect in the first quarter of 2025
The first quarter is usually slow for real estate. This is because of the cold weather and people waiting for spring. Home inventories will stay low until February, then increase in March.
Lawrence Yun, chief economist at the National Association of Realtors, says home purchases will rise in March. Rick Charga, CEO of CJ Patrick, expects weak home sales and small price increases. But low mortgage rates might help buyers.
Mortgage Rate Forecast for the First Quarter
Buyers are getting more confident with falling mortgage rates. As of December 20, 2025, the average 30-year mortgage rate is 6.88 percent. Greg McBride expects a 6.75 percent average for a 30-year fixed-rate mortgage this quarter.
Shri Ganeshram, CEO of AWNING, thinks interest rates might go up to 7.75 percent for 30-year loans.
Where are sales activity and house prices headed?
Home sales are expected to improve in 2025, reaching 5.5 million units. But the housing shortage might lead to a 2 to 4 percent increase in house prices. Sharjah expects home affordability to improve with mortgage rates going down and wage growth.
Housing Inventory Forecast for the First Quarter
Housing stock shortages are a big challenge for buyers. Mortgage applications have gone up with low interest rates. Yun predicts a 30 percent rise in inventory and more options for buyers in 2025.
However, Sharjah believes there won't be a big increase in existing home sales until mortgage rates drop further.
Strategies for Home Buyers and Sellers
Experts are optimistic about affordable mortgages with possible rate cuts. Buyers should prepare for competitive markets and explore non-traditional financing. Sellers should price their homes correctly to avoid a recession.
Q&A Section
Q1: Will mortgage rates continue to decline throughout 2025?
A: Yes, experts like Greg McBride expect mortgage rates to keep falling.
Second question: How can buyers navigate competitive markets in the first quarter?
A: Buyers should look into non-traditional financing and be ready to act fast on purchases.
Q3: Are house prices expected to decline in 2025?
A: No, house prices are expected to rise by 2 to 4 percent nationwide due to the housing shortage.
Stay updated on the housing market for the first quarter of 2025. Learn about mortgage rates, sales activity, and inventory forecasts. Get tips for buyers and sellers in a competitive market. Make informed decisions in the changing real estate world.