The next five years are likely to mark the start of increased sales activity, but flatter price increases are expected. Some ads and offers on this page come from advertisers who pay us. This may influence the products we write about, but it doesn't affect what we write about them. Here's an explanation of how we make money and our outreach to advertisers.
The answer depends on several factors, especially where you are going to buy a home. Here's what you need to know about home prices as we approach the fall season. Even so, inventory is lower than before the pandemic, and we're unlikely to see a big increase in ads until mortgage rates go down. Many current homeowners are reluctant to give up the 3% mortgage rates they had obtained at the beginning of the pandemic, especially considering that 30-year mortgage interest rates remained in the upper -6% range throughout this year.
But if you want or need to buy a home before those declines take place, choosing your market carefully can be a great way to get a good deal. For example, in Austin, Texas, home prices have fallen nearly 5% over the past year, and a typical home stays on the market for 65.5 days. Nearly a third of ads are experiencing price cuts. Waiting for more inventory or lower mortgage rates isn't the only way to buy a home affordably.
Here are some strategies to consider if you see yourself as a homeowner in the not-too-distant future. Buy with your sights set on refinancing. You could enter the market today with a home in your price range and try to refinance it in the future. While you may be able to get a smaller home for your budget, you can start accumulating equity.
When rates go down, you can refinance your mortgage with a lower rate or even with a completely different type of mortgage loan. While it may not be your dream home, you could find the perfect home in today's market by buying a condo or buying land and putting a small house in it. Both types of housing can cost considerably less than a single-family home and help you accumulate capital that translates into cash when you're ready to expand your size. Modular homes are those that look the same as a single-family home when are built.
The only difference is that they are integrated into off-site modules and are assembled when they arrive in your batch. They can also cost 10% to 20% less than a traditionally built home. It may be good to buy a home in 2026 because, based on industry forecasts prepared by Fannie Mae and the Mortgage Bankers Association, interest rates are likely to decrease gradually by then. House price growth is also expected to slow down.
In general, home prices will fall when supply exceeds demand, and sellers need to lower prices to attract buyers. In July 2025, the supply of housing was increasing, but not to the point where the number of homes for sale had reached pre-pandemic figures. If your finances are in order and you're at the right stage in your life, it might be a good time to buy a home. Interest rates have stubbornly remained high, but they are not at sky-high levels.
Home price growth has also slowed, and many markets have even seen price drops in recent months. There are several ways to buy a home with cryptocurrency instead of a regular mortgage. Find out which option is best, plus the benefits and risks of each one. The escrow exemption allows you to give up an escrow account when you buy and are homeowner.
Learn the pros and cons and if an exemption is right for you. Withdrawing money from an IRA to buy a home is a viable option, but there are advantages and disadvantages. Find out if using an IRA to buy a home is the right thing to do. Financing programs with cash offers allow you to make a cash offer for a home and then apply for a mortgage to repay the lender.
Learn how to compete with cash offers. According to recent forecasts from Fannie Mae, mortgage rates could fall by around 0.32 percentage points in the second half of 2025.1 But that will depend on whether the Federal Reserve decides to lower the federal funds rate, which influences mortgage rates. As a context, the average of 15-year fixed-rate mortgages was below 6% at the end of July, so a drop of 0.32 percent would place the average rate around 5.5%. The real estate market has been going through a serious crisis since the COVID-19 pandemic, with limited inventory, high home prices and mortgages in the 7% range, which continues to keep many potential buyers out of housing.
However, even in the midst of such tight restrictions, modest drops in housing prices can still be seen in some regions of the country. The cities with the biggest price drops were Austin, where average sales prices fell nearly 15% over the past three years; and Miami, where prices fell about 19%. According to Krimmel, inventory is increasing in these markets as homes stay on the market longer and new listings increase. The construction boom also boosted housing supply in those regions during the COVID-19 pandemic, when demand in markets such as Austin, Denver and Miami skyrocketed, he added.
Part of the reason construction in those cities took off, Krimmel added, was because the laws of their respective states make it easier to build during large flows of demand. Real estate markets in Northeastern and Midwestern cities remain restricted due to high prices and a shortage of inventory, Krimmel said. Other contributing factors include stricter zoning laws and land use regulation, which make it difficult to build new housing, he said. In addition, the number of active ads per month in the Northeast is still 50% below pre-pandemic levels, according to Krimmel.
The number of active ads in the Midwest has dropped 40%, pointing to an inventory shortage in both regions, he said. From startups to traditional brands, you're making your mark. Prepare for future growth with personalized loan services, succession planning and capital for business teams. We serve the world's leading institutional investors and corporate clients and support the entire investment cycle with market-leading research, analysis, execution and investment services.
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Explore a variety of ideas organized by different topics. Explore a variety of ideas organized by different types of content and media. Our goal is to be the most respected financial services company in the world and to provide services to companies and individuals in more than 100 countries. With several variables affecting the U.S. housing market, from rising home prices to falling demand, where is the sector heading in 2025? Discuss the prospects with J.
P. Morgan Research, considering the possibility of establishing a new set of political priorities during the Trump administration. The supply of the real estate market remains scarce at the national level. Head of the U.S.
UU. Homebuilding and Building Products Research, J, P. Morgan Multifamily construction begins and ends But there is another key issue at play, which is to restrict supply more than any possible basement. People are staying there longer because of high interest rates, so the housing stock isn't being freed up.
These are borrowers who have a significant disincentive to sell their home, and this is creating a supply shortage. Demand in the housing market is seriously suppressed by interest rates. The presence of vacancies also suggests a demand problem, as lower vacancy rates point to possible restrictions on supply. Vacancies indicate that there is enough housing available, but it may not be the right type, in the ideal location, or not affordably priced.
The low number of vacancies points to possible supply restrictions. When mortgage rates doubled in the 1980s, vacancy rates bottomed out near of 2.5%. The most recent doubling of mortgage rates led to a similar low. How could housing policy evolve during Trump's second term? J.P.
Morgan, director of Securitized Products Research, other possible solutions, such as multifamily construction in zoned areas for single-family homes, seem unlikely under the Trump administration. Overall, Trump has opposed multifamily developments in predominantly single-family neighborhoods. In addition, an important promise of the campaign was to prevent the development of housing for low-income people in suburban areas. On the demand side, Trump has spoken less about solutions.
However, he has consistently emphasized the effects of immigration on housing market demand. Reducing immigration would mean reducing the supply of labor in the construction industry, which could end up exacerbating the lack of affordable housing. Beyond housing, several of Trump's proposals could, if implemented, lead to increased inflation, which would likely result in higher mortgage rates that would further curb housing demand. In particular, attention is expected to be focused on the privatization of government sponsored companies (GSE), including the Federal Mortgage Loan Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).
If executed hastily, this could widen the spreads of mortgage-backed securities (MBS) and make interest rates even higher for borrowers. Dive into the complexities of the U.S. Real estate market with Anthony Paolone, co-director of US Real Estate Stock Research and John Sim, director of Securitized Products Research. After the Federal Reserve's decision to stop rate cuts, what could be your next move? At a time when uncertainty about government policies has been historically high, the Federal Reserve remains firmly in suspense waiting for greater clarity about the economic outcome.
How much are mortgage rates in the U.S. USA?Is it expected to fall? And what does the economic context mean for the real estate market in general? Analysts predict that housing prices could continue to fall in 2025, especially in high-cost areas such as San Francisco, where layoffs from the technology sector and remote work trends have had an impact on housing demand. However, the extent and timing of a potential recession remain uncertain, as factors such as interest rate policies, economic conditions and inventory levels will play a crucial role in shaping the market's trajectory. RESIClub has a new data partnership with Epum, a real estate research laboratory that focuses on monitoring commercial real estate projects, including single-family rental and construction projects for rent, in planning or under construction across the country. The Epum platform is the definitive resource for tracking, visualizing and analyzing parcel level site plan approvals, rezoning, and special exceptions for new homes or other CRE projects in planning.
You can view the Epum product demo here. In March, Zillow lowered its outlook to 12 months for the U.S. In February, Zillow lowered its 12-month outlook to +1.1%. And at the beginning of the year, in January, Zillow's 12-month national home price forecast was +2.9%.
Why is Zillow continuing to lower its national home price outlook? Based on Zillow's home price model, the home sales website also believes that the weakening and weakness of real estate markets across the Gulf will affect aggregated home prices nationwide this year. In metropolitan real estate markets, Zillow expects the highest home price appreciation between March 2025 and March 2026 to occur in these 10 areas. In metropolitan area real estate markets, Zillow expects the weakest home price appreciation between March 2025 and March 2026 to occur in these 10 areas. Below is the current year-on-year growth rate in the price of single-family and condominium housing.
Ahead of the new Zillow forecast, Florida is the epicenter of housing market weakness right now. RESIClub PRO members can view our most recent analysis of home prices in more than 800 metropolitan areas and more than 3,000 counties here. What do you think about Zillow's updated regional forecast? I'm a little surprised that Zillow isn't forecasting housing price growth in the Midwest and Northeast. After all, Zillow still considers many areas of the Midwest and Northeast regions to be seller's markets.
I should note that not all forecasters are as bearish for 2025 as Zillow. The California housing market has long been known for its volatility, sky-high prices, and your limited inventory.
