Redfin’s 2025 housing market forecast predicts resilient homebuyers
People wanting to know what to expect from the housing market in 2025 have no shortage of economic forecasts from real estate industry companies to browse.
Redfin Economists Daryl Fairweather and Chen Zhao are the latest to give their opinions. They predict that house prices will rise by 4% over the course of 2025, with sales of existing homes between 4.1 million and 4.4 million.
This outlook is slightly more optimistic than the forecast HousingWire. Conducted by HousingWire Principal Analyst Logan Mohtashami and Alto’s research President Mike Simonsen expects existing home sales to reach 4.2 million and home prices to rise 3.5%.
But Redfin’s prospectus is right in the middle of the forecasts analyzed by HousingWire. Home sales forecasts range from 4.9 million – which is the projection of the National Association of Real Estate Agents – And Realtor.com’s 4 million.
Redfin’s expectation that mortgage rates will be just under 7% is at the high end of the range set by other forecasts, but they all agree that the election of Donald Trump could mean volatility for rates.
Trump has proposed steep rates about America’s NAFTA partners and the so-called BRICS countries, including China and some of its allies. He has also threatened to use the military to carry out mass deportations of undocumented immigrants.
Both policies would affect the housing market. Economists believe that tariffs could reignite inflation and force inflation Federal Reserve to reconsider its policy of interest rate cuts. Taken together, the tariffs and deportations could increase input costs for homebuilders, including those for lumber and construction labor.
Redfin credits both proposals as having the potential to keep mortgage rates high, but adds that high interest rates may not hinder sales as much as expected.
“Even before the election, our data showed that rising mortgage rates did not deter buyers as much as expected, likely in part because many Americans have grown accustomed to high mortgage rates,” Redfin’s forecast reads. “If the economy remains strong and enough people can afford next year’s high housing costs, that would boost sales.”
Redfin also notes that any increase in homebuilding costs could be offset by reduced regulations around construction, adding that builder confidence has soared in the days following the November election.
Other predictions in Redfin’s forecast include the possibility of consolidation in the real estate industry due to a different approach to mergers and acquisitions within the real estate industry. Federal Trade Commission.
The company believes the post-pandemic “flight to the suburbs” will continue to reverse, with city dwellers returning to big cities. The forecast also notes that members of Generation Z will give up homeownership and remain renters well into their 30s.
The Association of Mortgage Bankers, Fannie Mae, Realtor.com And Clear MLS have also published housing market forecasts for 2025.
