- Home Sales Increase: Zillow anticipates a rise in home sales as the housing market gradually becomes more dynamic. They predict a 2.6% increase in home prices for 2025, with existing home sales reaching 4.3 million, up from 4 million this year. This suggests that while affordability challenges persist, there will be more homes on the market, providing buyers with greater negotiating power.
- Choppy Mortgage Rates: The firm forecasts that mortgage rates will experience fluctuations throughout 2025. Following recent trends of rates swinging close to 7%, Zillow expects similar volatility this year, leading to potential refinancing opportunities during rate dips.
- Potential Buyers’ Market in the Southwest: Currently, most buyers’ markets are in the Southeast, but Zillow suggests that the Southwest may present opportunities for buyers in 2025. As inventory increases, competition among sellers could intensify, providing buyers with more options and leverage.
- Popularity of Smaller Homes: Smaller homes are expected to become increasingly popular. Zillow highlights a growing interest in “cozy” homes, as reflected by more frequent mentions in listings. This trend towards downsizing is driven by stabilizing home values for small condos and continued softening of larger property values, partially due to remote work reducing demand for larger spaces in urban areas.
