2025 Market Preview

At the NAR NXT conference in Boston, NAR.com | Lawrence Yun, chief economist of the National Association of REALTORS®, offered an optimistic forecast for the housing market, predicting recovery by 2025 and 2026. He expects home sales to rise, with existing-home sales increasing by 9% in 2025 and 13% in 2026, driven by improving job numbers, rising inventory, and reduced election-related uncertainty.

Jessica Lautz, NAR’s deputy chief economist, discussed changing buyer demographics. First-time buyers are older, multigenerational households have reached record levels, and all-cash purchases are increasing due to homeowners leveraging equity. Urban living is also seeing a resurgence, reflecting the market's adaptability to economic pressures.

Mortgage rates remain a challenge, with stabilization at the lower end of current levels expected but significant declines unlikely due to the federal budget deficit. Yun highlighted structural changes, such as reducing the deficit or easing regulations, as potential pathways for rate improvements, though these outcomes remain uncertain.

Despite affordability challenges, Yun noted resilience in the market, with life milestones like births and job changes driving demand. He emphasized the need for increased housing supply to ensure equitable access to homeownership as the market gradually recovers. 

--- JRL