A new forecast from Zillow (NASDAQ: Z, ZG) is pointing to increased homebuying activity during 2025, although market challenges could slow its progress.
Zillow is predicting 4.3 million in existing home sales during the coming year, up slightly from 4.1 million in 2023 and a projected 4 million in 2024. And while Zillow noted that there are currently 13 major metro areas that are buyers’ markets – with most of those in the Southeast – next year could see a new wave of buyers’ markets across the Southwest as inventory continues to expand in relatively affordable markets.
Also in the forecast is a 2.6% home value growth next year. However, mortgage rates could continue to swing next year, with Zillow expecting bursts of refinancing activity during period of rate dips.
“Buying a home in 2024 was surprisingly competitive given how high the affordability hurdle became. More inventory should shake loose in 2025, giving buyers a bit more room to breathe,” said Skylar Olsen, Zillow chief economist. “Americans are adapting to sky-high costs by embracing coziness, a term that for so long has been a thinly veiled critique in real estate lingo. Many are also viewing renting as a longer-term lifestyle. A construction boom has eased pressure on rent prices, putting rent affordability on track to improve next year — that is, as long as wages continue to grow.”
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