Zillow: Five Home Trends To Follow in 2025
Zillow's research reveals that in 2025, homes are increasingly incorporating both nostalgic and high-tech features. "Cozy" has become a popular term in listings, reflecting a shift towards smaller, segmented rooms and nature-inspired colors like earth tones. Sustainability is another rising trend, with more homes featuring solar panels, whole-home batteries, and electric vehicle chargers. Nostalgic touches like floral patterns, antique furnishings, and sculleries are also gaining attention. Additionally, climate-resilient features like drought-resistant lawns and flood barriers, along with luxurious bathrooms, are becoming more sought after by buyers. --- JRL
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
How Does the Election Affect Real Estate?
With another presidential election on the horizon, housing has emerged as a central issue, driven by rising mortgage rates, high prices, low supply, expensive construction, and growing homelessness. Vice President Kamala Harris recently proposed measures like a $25,000 downpayment assistance program, while former President Trump criticized the Federal Reserve, with some of his allies even suggesting abolishing it altogether. Despite both candidates emphasizing housing, their plans still lack detail, raising questions about the actual influence a president can have on the housing market. Matt Myre at BiggerPockets reviewed 30 years of data, starting with President Bill Clinton, and argues the housing market is primarily driven by supply and demand, not presidential policies. Housing prices have generally increased over time, with the only major disruptions being the 2008 financial crisis and a stable period under Trump. This trend indicates that no single president has significantly influenced housing prices. Homeownership rates have also remained stable since 1993, challenging the idea that corporate landlords are taking over the market. Rental vacancy rates have fluctuated, but these changes are more closely tied to housing supply than to presidential actions. Overall, the data shows that the housing market's fundamentals are shaped by supply and demand rather than by who is in office. The Federal Reserve, which controls interest rates, plays a more significant role in short-term housing trends. While the president can nominate the Fed Chair, the institution operates independently, limiting the president's direct influence. However, through the "bully pulpit," the president can shape public discourse and influence policy indirectly. Historically, presidents have impacted housing policy, such as Franklin D. Roosevelt's creation of the Federal Housing Administration (FHA) during the Great Depression, which had lasting effects on the housing market. Subsequent administrations have continued to build on this foundation, establishing agencies like Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development (HUD), which play key roles in housing finance. However, the effectiveness of presidential housing policies is often mixed. For instance, President Clinton's efforts to increase homeownership contributed to the subprime mortgage crisis. In recent years, presidents have been more cautious, with Trump’s tax cuts and Biden’s Housing Supply Action Plan showing limited results. All this to say, while the president can influence housing through policy and appointments, the market's trajectory remains largely dependent on supply and demand. As the nation faces ongoing challenges in housing, the focus should be on creating conditions where supply meets demand, rather than relying on political promises. - JL
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