If you're wondering what to expect in the real estate world next year, you're not alone. The good news is, most agents are optimistic about the 2025 housing market. A recent survey revealed that a significant majority of real estate professionals anticipate rising home prices and increased transaction volumes throughout the year. Let's dive into what's driving this positive outlook and what it could mean for you, whether you're buying, selling, or just keeping an eye on things.

Housing Market Predictions for 2025 by Real Estate Agents

Why Are Agents Feeling So Good About 2025?

It's easy to feel overwhelmed by the constant chatter about economic ups and downs, interest rates, and housing inventory. These things can make even seasoned real estate folks a little uneasy. However, digging deeper, it seems there's a good reason for the optimism I'm seeing among my colleagues.

Zillow's recent survey of over 300 agents across the U.S. in late 2024 provides some solid insights. Let's break down the key findings:

• Rising Home Prices: A whopping 67% of agents believe home prices will continue to climb over the next 12 months. Even more interesting, 20% of those foresee a large increase. This is a significant jump from mid-2024 when only 44% expected prices to keep rising.
• Increased Transactions: Despite economic uncertainties, a strong 72% of agents predict that the number of home sales will increase. Almost a quarter of that percentage, 22%, are expecting to see a large increase in transactions. Only a mere 10% think transactions will go down.
• A Shift to a Neutral Market: The market is becoming more balanced. 45% of agents believe we're in a buyer's market, while 41% think it's a seller's market. This near-even split suggests a more stable and predictable environment for both buyers and sellers.

But how can we reconcile these optimistic predictions with the realities of affordability and recent sales figures?

The Balancing Act: Prices, Sales, and Affordability

There's a bit of a puzzle here. The National Association of Realtors (NAR) reported that home sales in 2024 hit their lowest annual level since 1995, with just 4.06 million homes sold. So, how can agents simultaneously expect rising prices and increased transaction volume?

Here's my take:

• Pent-Up Demand: After a period of caution and lower sales, there's likely a significant amount of pent-up demand in the market. People put their plans on hold in the face of uncertainty, but life events – marriages, growing families, job changes – don't stop. This can lead to more people looking to move.
• Adaptation to Higher Rates: While interest rates have been a concern, buyers and sellers are starting to adjust. People are adapting by considering smaller homes, different locations, or waiting a bit longer to save more for a down payment. Sellers are more willing to negotiate.
• The “Neutral” Sweet Spot: A neutral market means neither buyers nor sellers have a significant advantage. This can encourage more transactions as both sides feel like they have a fair shot at getting a good deal.

Personal Thoughts and Expertise

As a real estate investor, I've seen firsthand how market sentiment can shift quickly. The optimism I'm hearing from colleagues isn't just based on numbers. It's driven by a sense that the market is finding its footing after a period of volatility.

Important Note: It's really important to note that the national level data can sometimes be a bit too broad to be relied upon fully. I would highly suggest you consider the market conditions of your specific area.

Where Are We Seeing the Biggest Shifts?

The housing market is highly localized. What's happening in one city or state might be completely different elsewhere. According to the Zillow survey, we're seeing:

• Buyer's Markets: Emerging in parts of the Southeast. This might be good news for first-time homebuyers or those looking for more negotiating power.
• Seller's Markets: Still strong in major cities on both coasts. If you're selling in these areas, you might be able to command a higher price.
• Neutral Markets: Predominantly in the Midwest and parts of the Southwest. These areas offer a more balanced environment for both buyers and sellers.

Table: Regional Market Trends

What Does This Mean for You?

Whether you're buying, selling, or investing, understanding these trends is essential. Here's a quick breakdown:

• For Buyers: Don't panic! Even with rising prices, there are still opportunities. Work closely with your agent to find properties that fit your budget and needs. Consider exploring markets where buyers have more leverage.
• For Sellers: While the market might be shifting towards neutral, you can still get a good price for your home. Work with your agent to stage your home effectively and price it competitively.
• For Investors: Keep a close eye on local market conditions. Look for areas with strong growth potential and consider both short-term and long-term investment strategies.

Why Trust These Predictions?

It's natural to be skeptical about predictions, especially when it comes to something as important as the housing market. However, surveys like Zillow's provide valuable insights because they:

• Capture Real-Time Sentiment: They reflect the actual experiences and expectations of agents who are on the front lines of the market.
• Combine Data and Experience: They blend statistical data with the practical knowledge of professionals who work with buyers and sellers every day.
• Offer a Broad Perspective: By surveying agents across the country, they provide a more comprehensive view of the national market.

Summary:

While uncertainty will always be a factor in the real estate world, the general sentiment among agents is undeniably optimistic. The predicted rise in home prices and transaction volumes, combined with a shift towards a more balanced market, suggests a more stable and predictable environment for buyers and sellers alike. If the market is on the upswing or not, the key to success in the 2025 housing market will be staying informed, working with a knowledgeable agent, and making informed decisions based on your specific needs and goals.

Is the housing market about to take a tumble? According to Zillow's latest forecast, the answer is a resounding yes. Zillow now predicts that U.S. home prices will fall by 1.7% between March 2025 and March 2026. It is a dramatic shift that signals the company is growing increasingly bearish on the housing market's near future.

Housing Market Crash Alert? Zillow Turns Negative on Home Prices

Let's be honest, it's not every day that a major player like Zillow makes such a stark prediction. For months, they've been gradually revising their outlook, and this latest drop is significant. To put it in perspective, here's a look at how Zillow's 12-month forecast for national home prices has changed recently:

• January: +2.9%
• February: +1.1%
• March: +0.8%
• Now: -1.7%

I believe, the consistent downward trend paints a clear picture: Zillow sees trouble on the horizon. Why should we care? Because Zillow has access to a massive amount of housing data. Their models are closely watched by investors, real estate professionals, and anyone considering buying or selling a home. Their forecasts, while not infallible, carry weight.

The “Why” Behind the Worry: Affordability and the Sun Belt

So, what's driving Zillow's pessimism? According to their economists, two main factors are at play:

• Strained Housing Affordability: This is the big one. The pandemic-era housing boom sent prices soaring by over 40%, and then mortgage rates doubled in 2022. This combination has made it incredibly difficult for many people to afford a home. The average person is either unable or unwilling to pay such huge premiums.
• Weakening Sun Belt Markets: The Sun Belt has been a hotspot for housing growth in recent years, but Zillow believes that the party is ending. Softening and weakening markets in this region will drag down national home prices.

Digging Deeper: Affordability and Its Grip on the Market

Think about it: even with mortgage rates leveling off somewhat recently, they're still significantly higher than they were just a few years ago. This means higher monthly payments, even for the same priced house. The result? Potential buyers are staying on the sidelines, opting to rent for longer. This decrease in demand puts downward pressure on prices. I strongly believe, housing affordability is a very concerning problem right now.

Sun Belt's Sunset: Why the Boom is Cooling Down

The Sun Belt's rapid growth was fueled by factors like lower taxes, warmer weather, and more affordable housing (compared to coastal cities). However, as more people moved in, prices increased, and the appeal began to fade. Now, with more inventory coming onto the market, buyers have more choices, and prices are adjusting accordingly. Also, the insurance rates in some parts of the Sun Belt has gone sky high which has forced many people to move out, creating downward pressure.

Winners and Losers: Where Zillow Sees the Biggest Changes

Zillow's forecast isn't uniform across the country. They expect some markets to perform better than others.

• Strongest Home Price Appreciation (March 2025 – March 2026):
  • Atlantic City, NJ: 2.4%
  • Kingston, NY: 1.9%
  • Rochester, NY: 1.8%
  • Knoxville, TN: 1.7%
  • Torrington, CT : 1.6%
  • Bangor, ME: 1.5%
  • Syracuse, NY: 1.4%
  • Vineland, NJ: 1.4%
  • Concord, NH: 1.3%
  • Norwich, CT: 1.2%
• Weakest Home Price Appreciation (March 2025 – March 2026):
  • Houma, LA: -10.1%
  • Lake Charles, LA: -8.9%
  • New Orleans, LA: -7.6%
  • Lafayette, LA: -7.5%
  • Shreveport, LA: -7.0%
  • Alexandria, LA -7.0%
  • Beaumont, TX : -6.6%
  • Odessa, TX: -6.3%
  • Midland, TX: -5.7%
  • Monroe, LA: -5.5

What Does This Mean for You? A Buyer's or Seller's Market?

If Zillow's forecast proves accurate, we could be heading toward a more buyer-friendly market. Here's how it might impact different groups:

• Potential Homebuyers: This could be good news! You might have more negotiating power and be able to find a home at a more reasonable price. Be patient, do your research, and don't rush into anything.
• Current Homeowners: Don't panic! A slight price drop doesn't necessarily mean you'll lose money. However, if you're planning to sell in the next year or two, it might be wise to adjust your expectations and be prepared to negotiate.
• Real Estate Investors: This could be an opportunity to scoop up properties at lower prices, especially in markets that are expected to decline. However, do your due diligence and be aware of the risks.

My Take: Navigating the Uncertainty

I've been following the housing market for years, and one thing I've learned is that it's impossible to predict the future with certainty. Zillow's forecast is just one piece of the puzzle. It's important to consider other factors, such as interest rates, economic growth, and local market conditions.

However, Zillow's downward revision is a signal that the housing market is facing some serious headwinds. If you're thinking about buying or selling a home, now is the time to educate yourself, consult with a real estate professional, and make informed decisions.

Conclusion: Proceed with Caution

Zillow turns full-blown housing market bear – this is a headline that should grab your attention. While a market correction could create opportunities for some, it also carries risks. Stay informed, stay cautious, and remember that real estate is a long-term game. I would personally wait and see what happens with inflation.

Is the American dream of homeownership about to get a rude awakening, courtesy of China? The question of can China crash the US housing market in 2025 and how is a complex one that's been keeping economists and homeowners alike up at night. The short answer? It's unlikely that China alone can cause a full-blown crash.

While China’s economic actions, especially in response to tariffs, could make things tougher, a true crash would likely need a perfect storm of other economic disasters. Let's dig a little deeper to see exactly what's at stake.

Can China Crash the US Housing Market in 2025?

A New Trade War: Echoes of the Past?

Remember those trade wars from a few years back? Well, they are back and with a vengeance! During his second term, President Trump has slapped some seriously high tariffs on Chinese goods, some hitting a whopping 145%. The goal? To bring down trade deficits and tackle issues like illegal fentanyl entering the country. But China isn't backing down. They've fired back with their own tariffs, reaching up to 125% on certain U.S. products. Think of it like a game of economic chess where each move can have big consequences.

Now, this trade war isn't just about bragging rights. It can directly affect the US housing market, and here's how.

The Direct Hit: Higher Construction Costs

One of the most straightforward ways tariffs impact housing is through the cost of materials. Think about it – how much do you use materials in building a house? A lot!

• Imported Building Materials: A significant chunk of the materials used to build houses in the US come from China.
• Rising Prices: Tariffs drive up the prices of these materials, like steel, aluminum, and even appliances.
• NAHB Estimates: The National Association of Home Builders (NAHB) estimates that these tariffs can add thousands of dollars (between $7,500 and $10,000!) to the cost of building a single home.

This can create a ripple effect:

• Higher Home Prices: Builders may pass those costs on to buyers, making homes more expensive.
• Reduced Supply: Some builders might decide to build fewer homes altogether, tightening the housing supply.

Here’s a table illustrating how these tariffs are affecting the construction industry:

Beyond the Bricks: Indirect Economic Impacts

It is not just the price of bricks and mortar that are affected. These trade disputes create economic uncertainty.

• Consumer Confidence: A shaky economy can make people less confident about buying a home.
• Recession Fears: If the trade war drags on, some experts worry it could trigger a recession.

Think of it this way: if people are worried about losing their jobs or if the economy looks uncertain, they're less likely to make a big purchase like a house.

China's Big Weapon: Mortgage-Backed Securities

Here's where things get a bit more complicated and where China could exert more influence. China holds a massive amount of US mortgage-backed securities (MBS), which are basically investments tied to home loans.

• What are MBS? These are bundles of home loans that are sold as investments.
• China's Holdings: China is one of the largest foreign holders of US MBS.
• The Threat: China could sell off these securities, flooding the market and driving up mortgage rates.

Why does this matter? Higher mortgage rates make it more expensive to borrow money for a home, which means fewer people can afford to buy.

Has China Already Started?

There is some evidence suggesting that China has been quietly reducing its holdings of US MBS. While this might not cause an immediate crash, it could signal a long-term strategy to put pressure on the US economy. I believe we should be aware of this.

However, it's not a Simple ‘Crash' Button

It's important to understand that even if China sold off a large chunk of its MBS, it wouldn't necessarily trigger a catastrophic crash on its own.

• Self-Inflicted Wound: Selling off those securities would also hurt China financially.
• Market Interventions: The US Federal Reserve or other big investors could step in to buy up those securities and stabilize the market.

So, Can China REALLY Crash the Market?

The bottom line is that China alone probably can’t trigger a full-blown housing market collapse just through tariffs or selling off MBS. A true crash usually requires a perfect combination of factors, such as:

• Severe Economic Downturn: A recession with widespread job losses.
• Collapse in Consumer Confidence: People losing faith in the economy.
• Other Unexpected Events: I cannot really predict this.

My Take and Final Thoughts

While I don’t think China can single-handedly crash the US housing market in 2025, I do think its actions can certainly make things tougher. Higher construction costs, rising mortgage rates, and increased economic uncertainty can all put a damper on the market.

The US housing market is a complex beast, influenced by a mix of domestic policies, global economic conditions, and plain old supply and demand. It's unlikely that China can simply press a button and make the whole thing fall apart. However, we should not underestimate the potential for economic disruptions and be prepared for challenges ahead. After all, being informed is the best defense!

Is a housing market crash on the horizon in 2025? If you're like most folks, you've probably been feeling a knot of anxiety about the economy lately. Well, you're not alone. A recent survey from Clever Real Estate reveals that a significant 70% of Americans are indeed worried about a housing market crash in 2025.

That's a pretty big number, and it definitely got my attention. This widespread concern isn't just some fleeting feeling – it’s rooted in real economic anxieties that many of us are grappling with every day. Let’s unpack what’s behind this fear and what it might mean for you, whether you're a homeowner, a renter, or dreaming of buying your first place.

70% Americans Worry About Housing Market Crash in 2025: Should You Be Concerned Too?

Why the Housing Market Crash Fear is Real – And Why It Matters

When I first saw that 70% figure, it really made me pause and think. That's not just a slight unease; that’s a significant majority of people feeling genuinely concerned. It tells me that there's something more than just media hype fueling this worry. And digging into the survey, it becomes clear that these fears are tied to a broader sense of economic uncertainty hanging over us as we head into 2025.

Let’s break down some of the key factors contributing to this widespread anxiety:

• Inflation is Still a Top Worry: A whopping 94% of Americans are worried about inflation, and 74% believe it will actually get worse in the next year. This is huge! When everyday things like groceries, gas, and utilities keep getting more expensive, people naturally start to worry about big-ticket items like housing. Inflation eats away at your buying power, and it makes everyone feel less secure.
• Economic Outlook is Fuzzy: Only 26% of Americans feel economically better off now than they did six months ago, and just 34% expect to be better off in another six months. These numbers paint a picture of widespread economic pessimism. If people don't feel confident about their financial future, it's natural to worry about big investments like homes.
• Government Action – Or Inaction?: A majority, 63% of Americans, don't think the current government is taking the right steps to address economic concerns. This lack of confidence in leadership adds another layer of unease. People want to feel like someone's in control and working to steer the economy in the right direction, and right now, many Americans just aren't feeling it.
• Rising Costs of Homeownership – Beyond Just the Mortgage: It's not just about affording a house these days. 89% are worried about rising home maintenance and repair costs, and 88% are stressed about increasing property taxes. Being a homeowner is becoming more expensive across the board, adding to the pressure and making people wonder if it’s all sustainable.

It's like a perfect storm of economic pressures is brewing, and the housing market, being such a significant part of our financial lives, is right in the center of it.

Echoes of 2008? Why Housing Crashes Stick in Our Minds

For many of us, the memory of the 2008 housing market crash is still pretty vivid – or at least, we've heard enough stories to know how devastating it was. I remember friends and family losing their homes, and the overall economic fallout was something that impacted everyone, whether you owned a house or not. That kind of event leaves a mark on our collective consciousness.

So, when we hear whispers of another potential housing market downturn, it's understandable that alarm bells start ringing. We don't want to repeat that experience. And while no two economic situations are exactly the same, some of the underlying anxieties feel familiar. Are we heading for a repeat? That’s the question on a lot of people's minds, including mine.

Tariffs, Trade Wars, and the Domino Effect on Housing

Another big worry highlighted in the survey is the fear of tariffs and trade wars. A staggering 81% of Americans are concerned about this, and 72% believe tariffs will hurt the US economy. Now, how does this tie into housing? Well, tariffs can increase the cost of imported goods, which can lead to higher prices for building materials, appliances, and all sorts of things that go into building and maintaining a home.

When the cost of construction goes up, it can push up the prices of new homes. And if people are worried about trade wars impacting the broader economy, they might become more hesitant to make big financial decisions like buying a house. It’s all interconnected. The global economic climate definitely casts a shadow over the housing market.

Cutting Back and Bracing for Impact: How People Are Reacting

It’s fascinating and a bit concerning to see how these economic worries are actually changing people's behavior right now. The survey reveals that 58% of Americans are already cutting back on non-essential spending in anticipation of economic troubles in 2025. That’s a significant chunk of the population tightening their belts.

And it’s not just about cutting back on lattes or entertainment. 32% of those who planned a major purchase this year are now delaying it, and that includes 22% who were planning to buy a home and 13% who were planning to sell. People are putting their housing plans on hold, waiting to see what happens. This hesitation itself can have a chilling effect on the housing market. If buyers pull back, it can slow down sales and potentially contribute to price drops.

Interestingly, a smaller percentage, around 32%, say they've even started stockpiling resources like canned food and first aid supplies. This suggests that for some, the worry goes beyond just finances and into a deeper sense of preparing for potential disruptions. It’s a sign of real unease in the population.

Here's a quick look at how economic worries are impacting consumer behavior:

Generational and Gender Divides in Housing Market Fears

It’s also interesting to see how these worries break down across different groups. The survey highlights some notable differences:

• Millennials vs. Boomers: Younger generations are feeling the housing payment squeeze more acutely. 41% of millennials are worried about affording housing payments in 2025, compared to only 26% of boomers. This makes sense – millennials are often earlier in their careers, may have less savings, and are facing higher housing costs relative to their income than boomers did at the same age.
• Women vs. Men: Women seem to be more worried about a housing crash than men. 77% of women are concerned about a potential crash, compared to 60% of men. There’s a similar gap when it comes to rising mortgage rates, with 72% of women worried versus 56% of men. This gender difference is intriguing and could reflect varying levels of financial security or risk perception.

These demographic differences tell us that the anxiety around the housing market isn't uniform. It’s hitting different groups in different ways, and it’s important to understand these nuances.

Government Policies and Public Trust – Or Lack Thereof

The survey also touches on public opinion about government policies and their effectiveness in addressing economic concerns. As mentioned earlier, a significant 63% of Americans don’t believe the government is taking the right actions. This lack of trust extends to specific proposals and policies.

For example, while 78% of Americans generally favor cutting government spending, only 46% support the current administration’s approach. Even Elon Musk’s Department of Government Efficiency (DOGE) task force only garners 44% support. And ongoing mass layoffs at federal agencies are supported by only 35%, with 82% worried about spending cuts in general.

What this tells me is that people are skeptical. They might agree with the idea of fiscal responsibility in principle, but they are not convinced that the current strategies are the right ones, or that they are being implemented in a way that will actually benefit average Americans. This lack of confidence in government can further amplify economic anxieties, including worries about the housing market.

Beyond Housing: Broader Worries About Social Safety Nets

The economic anxieties aren’t just about housing prices and mortgages. People are also deeply concerned about the potential erosion of social safety nets. A striking 85% are worried about Social Security benefit changes, making it the top concern among government programs. And 75% believe that cuts to government assistance programs would directly impact them or their families. Alarmingly, 11% even fear becoming homeless as a result of these cuts.

These figures highlight a broader sense of vulnerability and insecurity. It's not just about the value of your home; it’s about basic security and the feeling that the systems meant to protect us might be weakening. This kind of deep-seated worry can definitely contribute to overall economic pessimism and fuel fears about a housing market crash as part of a larger economic downturn.

Navigating the Uncertainty: What Does This Mean For You?

So, with all this worry swirling around, what should you actually do? Here’s my take, based on the data and my own observations:

• Don't Panic, But Be Prepared: While 70% worry about a crash, it doesn't mean a crash is guaranteed. Economic forecasts are always uncertain. However, it’s wise to be prepared for potential economic headwinds. Review your finances, build up some savings if you can, and consider stress-testing your budget to see how you’d fare if things get tighter.
• For Homeowners: Review Your Mortgage and Expenses: If you're a homeowner, now is a good time to look closely at your mortgage terms and your overall housing expenses. Are you comfortable with your monthly payments, even if interest rates were to nudge up further? Could you handle unexpected repair costs? Being proactive about your finances can give you peace of mind.
• For Potential Buyers: Patience Might Be a Virtue: If you're looking to buy a home, this might be a time to exercise a bit of patience. With so much uncertainty in the market, waiting a bit might give you a clearer picture of where things are headed. Keep an eye on interest rates, housing inventory, and overall economic indicators.
• For Renters: Stay Informed About Local Market Trends: Renters aren't immune to housing market shifts. If a housing market cools down, it could eventually impact rental prices too. Stay informed about what's happening in your local rental market.
• Engage in the Conversation: Talk to your friends, family, and financial advisor about these concerns. Sharing information and perspectives can help you feel more informed and less alone in your worries. And consider making your voice heard to policymakers about the economic issues that matter to you.

Ultimately, the fact that 70% of Americans worry about a housing market crash in 2025 is a significant signal. It reflects real economic anxieties and a widespread sense of uncertainty. While we can’t predict the future with certainty, understanding these concerns and taking prudent steps to prepare is always a smart move. Staying informed, being financially responsible, and engaging in constructive conversations are the best ways to navigate these uncertain times.

Are you glued to housing market news, trying to figure out what's next? Are prices going up, down, sideways? Well, the latest word from the National Association of Realtors (NAR) is in, and it's a bit of a mixed bag, but with a clear upward nudge on prices. The home price forecast jumps for 2025 and 2026, according to NAR's revised projections, meaning we're likely to see home prices grow faster than initially expected in the coming years.

While they've slightly tempered expectations for home sales volume, the anticipated price increases are now more pronounced. Let’s break down what this means for everyone from first-time homebuyers to seasoned sellers.

Housing Price Forecast for 2025 and 2026 Increased by NAR

For months, I’ve been digging into market data, chatting with real estate pros in my area, and trying to make sense of all the conflicting signals. Initially, there was a lot of buzz about a potential boom in 2025. Now, that excitement is a little more grounded in reality. NAR's recent update gives us a clearer picture, even if it's not exactly what everyone was hoping for – especially those dreaming of drastically cheaper homes.

Key Takeaways: What You Need to Know

Here are the essential points to keep in mind about NAR's revised home price forecast jumps for 2025 and 2026:

• NAR has adjusted its housing market forecast downwards for 2025 in terms of sales volume, now projecting 4.3 million existing-home sales.
• However, they’ve increased their home price growth expectations for both 2025 (to 3%) and 2026 (to 4%).
• The primary reasons for these revisions are persistent affordability challenges and a more realistic outlook on market dynamics.
• Despite the tempered sales forecast, NAR and other experts remain cautiously optimistic about the overall housing market, citing a strong job market, potential for lower mortgage rates, and slowly improving inventory.
• The revised forecast is more in line with other industry predictions, suggesting a consensus view of moderate growth with continued price appreciation.

Now Expect Stronger Home Price Growth

Remember those earlier forecasts that hinted at a moderate 2% bump in home prices for both 2025 and 2026? Well, NAR has tweaked those numbers. In their latest Real Estate Forecast Summit Update, they’ve dialed up their home price growth projections to 3% for 2025 and a more significant 4% for 2026. This adjustment, while seemingly small on the surface, signals a notable shift in expectations.

What caused this change of heart, you might wonder? It boils down to a few key factors that are shaping today’s housing landscape.

Why the Forecast Shift? Affordability and Reality Check

If you've been house hunting recently, you already know the biggest hurdle: affordability. Even though we’ve seen some fluctuations in mortgage rates, they haven't dipped enough to truly make a significant dent in how much house the average person can afford. Prices have also remained quite sticky, not falling as much as some might have hoped.

• Stubbornly High Prices: Home prices haven’t plummeted. In many areas, they are still elevated compared to pre-pandemic levels. This baseline of higher prices means any percentage increase translates to a larger dollar amount.
• Mortgage Rate Reality: While we all keep wishing for those super-low rates of the past, the reality is that rates are likely to stay higher for longer than initially anticipated. This directly impacts buyer purchasing power.
• A Dose of Realism: I think NAR, like many of us who follow the market closely, is simply being realistic. The initial optimism for a massive housing boom in 2025 was perhaps a bit overzealous. The market is resilient, yes, but the factors needed for a truly explosive surge just aren't fully in place right now.

Essentially, the revised home price forecast jumps are a reflection of these persistent affordability challenges and a more tempered view of how quickly things will change. It’s not that the market is going to crash – far from it. It’s just that the pace of improvement, especially for buyers hoping for price relief, might be slower than previously thought.

Decoding the Revised Numbers: Sales and Prices in 2025 and 2026

Let's get into the specifics. Here’s a side-by-side look at NAR’s previous and revised forecasts, making it easy to see where the changes are:

The table clearly shows the adjustments. While existing-home sales for 2025 are now expected to be lower than previously forecasted (4.3 million versus 4.9 million), the home price forecast jumps are the real story here. The anticipated price growth is now higher for both 2025 and 2026. This suggests that even with slightly fewer sales, demand and limited inventory are still likely to put upward pressure on prices.

Is It All Bad News? Reasons for Optimism Remain

Now, before you start feeling discouraged, especially if you're trying to buy a home, it's important to remember that this isn't a doomsday scenario. Despite the revised forecast, there are still plenty of reasons to be optimistic about the housing market's overall health.

As NAR Chief Economist Lawrence Yun pointed out, “The worst is over [for home sales]. The worst for inventory is over.” That’s a pretty strong statement coming from a leading expert. He also highlighted that the probability of a recession is still low, and key factors like job growth and the potential for lower mortgage rates are moving in a positive direction.

I echo this sentiment. From what I’m seeing and hearing, the market is showing resilience. Here’s why I believe there’s still room for optimism:

• Solid Job Market: A strong job market is the bedrock of a healthy housing market. People need to feel secure in their jobs to make big purchases like homes. The current job market, while having some shifts, is still generally robust.
• Mortgage Rates – Potential for Gradual Decline: While rates haven't plummeted, the consensus is that they are likely to drift downwards over time, even if slowly. Any decrease in rates will improve affordability and bring more buyers back into the market.
• Inventory – Slowly but Surely Improving: Inventory levels are still below historical norms in many areas, but they are starting to inch up in some markets. More homes on the market give buyers more choices and can help moderate price increases.

How Does NAR's Revised Forecast Stack Up?

It's always wise to look at different sources when making big decisions. Interestingly, NAR's revised forecast of 4.3 million existing-home sales for 2025 actually aligns more closely with predictions from other housing market experts.

Consider these figures:

• NAR (Revised): 4.3 million existing-home sales
• HousingWire (Mohtashami/Simonsen): 4.2 million existing-home sales
• Realtor.com: 4 million existing-home sales

This convergence of forecasts suggests that the revised NAR numbers aren't outliers but rather reflect a more widely held view of where the market is headed. It strengthens the credibility of the updated home price forecast jumps, as it’s not just one organization’s isolated opinion.

What does this mean for you?

• For Buyers: Focus on affordability above all else. Be patient but realistic. Don’t expect dramatic price drops. Budget carefully and be prepared for competition, especially for well-priced homes in desirable areas.
• For Sellers: The forecast suggests continued price appreciation, but don’t get overconfident. Price your home competitively based on current market conditions in your area. Work with a knowledgeable agent who understands local market nuances.

The housing market is always evolving, and staying informed is key. While the home price forecast jumps might not be thrilling news for buyers hoping for bargains, it does signal continued stability and moderate growth in the real estate sector. For both buyers and sellers, navigating this market successfully will require informed decisions and a realistic understanding of the current landscape.