Zillow’s 2025 Housing Market Forecast

The article from CNBC discusses Zillow’s forecast for the 2025 housing market, which predicts a bumpy but potentially buyer-friendly year.

Key Points Relevant for Business Owners

Affordability Challenges

The housing market is expected to remain subdued in 2025 due to affordability challenges and the lock-in effect, where homeowners are reluctant to sell their properties because of high mortgage rates[1][3].

Home Price Growth

Zillow projects home-price growth of 2.6% in 2025, which is relatively stable compared to previous years. However, some areas may see outright home price declines if national prices rise only 0.9% over the next 12 months[2][4].

Inventory Increase

Rising inventory is expected to give buyers more leverage, particularly in the Southwest where buyers’ markets are anticipated to expand[2].

Mortgage Rates

While mortgage rates are a significant wildcard, the Federal Reserve’s potential to hold off on rate cuts due to economic uncertainty and inflationary pressures could further impact the market[2].

Buyer-Friendly Trends

By 2025, 75% of homeowners are projected to hold mortgages under 6%, which could ease the lock-in effect and make more homes available for sale[3].

Forecasts Vary

Different organizations have varying forecasts for existing-home sales, ranging from 4.2 million to 4.9 million, and home-price appreciation from 2.6% to 3.5%[2][3].

Implications for Business Owners

For business owners in the real estate sector, understanding these trends is crucial for strategic planning. The potential for a buyer-friendly market and increased inventory could signal opportunities for growth, but the uncertainty around mortgage rates and affordability challenges must be carefully managed. Additionally, adapting to regional variations in market conditions, such as those in the Southwest, could be beneficial for businesses looking to capitalize on shifting market dynamics.