January 9, 2025 • 32 mins
What are the so-called experts predicting for the housing market in 2025? Today, I will shed light on the anticipated changes in home sales, mortgage rates, and inventory.
Join me as I dive into the expert opinions and trends that will impact homeownership, providing valuable insights for real estate professionals and aspiring buyers alike.
Some key points I will discuss:
• Predictions point to a potential increase in home sales ranging from 2% to 12%
• Mortgage rates forecasted to stabilize around 6% with gradual declines
• Inventory levels are expected to improve, alleviating pressure on prices
• Home prices anticipated to rise modestly between 2% to 4%
• Significant shifts in buyer demographics and financing methods emerging
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Gary
* Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your area.
Don't forget to like us and share us!
Gary
* Gary serves on the South Carolina Real Estate Commission as a Commissioner. The opinions expressed herein are his opinions and are not necessarily the opinions of the SC Real Estate Commission. This podcast is not to be considered legal advice. Please consult an attorney in your area.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
This is Dish and Dirt with Gary Pickren, south
Carolina's only podcastdedicated to the real estate
agent craft.
And now the host of Dish andDirt, gary Pickren.
And greetings, welcome backeveryone to another episode of
Dish and Dirt.
I'm your often opinionated butrarely wrong host, gary Pickren,
coming to you from thebeautiful Columbia, south
Carolina, offices of Blair CatoPickrenan this the second week
(00:26):
of 2025.
Big news on the horizon we'regoing to share with you here in
just a minute about Dish andDirt, but before we do that,
let's remind you of the fourthannual Real Estate Success
Summit coming up here January29th in Columbia, south Carolina
, at the Central Energy Building.
Tickets are on sale now and bycoming to this event, you're
(00:47):
going to get to see some of thebest speakers there is.
You get to see Chelsea Pites,who has been on Inman News and
Housing Wire, keller WilliamsC21.
You name the group.
She's spoken to them before.
In fact, she's named one of thetop marketers in the entire
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She is a beast when it comes tomarketing.
We also have from oh SnapSocial, one of our good friends,
(01:10):
carla Nancron, and then BillSabata is coming back from Close
Simple.
So we've got an incrediblelineup of big host guests, and
then we also have a lot ofsmaller TED Talk sections going
on during the session as well,and so you're going to leave
there with a lot, a lot ofaction items and good work put
into place.
Now you can get your ticketscheck in the link below.
You can also go to blaircatocom, click on the button at the top
(01:33):
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It's got the whole lineup, theschedule, everything is on our
website there.
If you buy tickets by the 12th,you can buy a ticket for $59.
By the 12th, you can buy aticket for $59.
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So $430, you get eight ticketsand a table.
So a lot of you brokers incharge, a lot of you team
(01:54):
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I had one person yesterday tellme they're going to buy four
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So we're starting to selltables.
It's the best way to do it.
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You can use it to bring peoplefrom your office, your team.
You can also use it to bringpeople you're recruiting to join
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Hint, hint, hint.
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(02:16):
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direct message us the size ofthe shirt you want.
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Remember, in the upstate wehave Spartanburg, greenville and
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(03:49):
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If you guys in CharlotteCharleston, sumter, if you will
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(04:11):
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We don't want to leave you out,particularly our guys up in
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I don't know if you all knowthis I've never talked about it
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(04:31):
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We may send them to one of ourlawyer friends up there and let
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get that done.
Let's go ahead now and look at2025.
Before we go through theindividual items I want to talk
about today, I do think it'simportant for this year's
prediction to look at it in thegeneral sentiment of what these
experts think about 2025,particularly in light of the
(04:54):
completion of 2024.
And I think if you look at NARthe National Association of
Realtors and how they succinctlysummarize what they believe
2025 is, I think it kind of setsthe pace for what we'll be
talking about today.
Lawrence Young, who is theNAR's chief economist I've seen
him speak several times.
He says homebuyers will havemore success next year.
(05:16):
The worst of the affordabilitychallenges are over, as more
inventory, stable mortgage ratesand continued job and income
growth will pave the way formore Americans to achieve
homeownership.
Ramsey Solutions says if youwere concerned about a potential
crash in 2025, you don't haveto worry about that.
You can put those worries tobay that there will not be a
(05:38):
crash at all.
The main reason they believethat is prices are not going to
drastically come down anytimesoon.
In fact, they quote the FederalHome Loan Mortgage Corporation
expectations of a price growthin 2025 is the reason why we are
going to avoid any type ofcrash.
The main thing they want you toknow about the housing market
is that home prices aredetermined by inventory,
(06:00):
obviously known as supply anddemand, and that's going to keep
a potential crash from nothappening.
Forbes, on the other hand, theyhave reported that for the best
possible outcome, we have tofirst see what the inventories
of home sales will be andwhether or not that will be
considerably higher.
Keith Gumbinger of HSHcom.
(06:21):
He tells Forbes that additionalinventory would ease the upward
pressure of home prices,leveling them off and perhaps
helping people settle back in,helping these rates settle back
in from peak or near peak levels.
They also, in that same articleby Forbes.
They discuss mortgages and howthat's affecting the general
market.
Obviously, mortgage rates, intheir belief, need to continue
(06:43):
to decline.
They've seen some movement inthe last month, but not very
great movement, but experts arestill, according to Forbes, very
hopeful that we're going to seemovement and great improvement
into the next year.
Obviously, gumbinger says thatas rates cool off, so will your
surge in demand, and as yoursurge in demand comes, it could
wipe out the inventory if thathappens too quickly.
(07:06):
Most important aspect thateverybody seems to be talking
about is this housing supply,which everybody says is the key
to the recovery.
They see little risk, however,the mortgage rates cooling off
too quickly.
They think it will be continuedsteady decrease and they will
continue to sound the alarmabout historical low inventories
, particularly as you havemillennials and other young
(07:27):
adults finally striving to getinto the housing market.
Freddie Mac, the economic andhousing research group at
Freddie Mac, say that theyanticipate mortgage rates to
gradually decrease in 2025.
And that will loosen up thelock-in effect and that will
obviously increase inventory andboosting sales.
So what you're seeing is, as ageneral sense, the main concern
(07:50):
is going to be inventory.
As the inventory goes, thehousing supply will be the
biggest obstacle that everybodyhas to overcome in this housing
market recovery.
If the inventory can expand,then obviously the effect on
home sales and everything elsewill fall right into place.
So today, what we're going to dois we're going to look at five
areas what are the expertstelling us about sales?
(08:12):
What are they telling us aboutmortgage rates, the inventory,
house prices, and then I callthe others, the others.
There's some other issues thatwe have to talk about, but I
want to start today with homesales, and let's talk about what
the so-called experts aretelling us.
First of all, about home sales.
So the question on everyone'smind as we enter into 2025, well
(08:32):
is will home sales rise?
We anticipated that 2023 wasthe bottom of the market, and
what we found is that 2024 waskind of still the bottom of the
market as well.
There was not this greatimprovement in sales numbers
from 23 to 24.
And so are we looking at moreof the same, or can we look into
some expectations?
I'll give you a brief overviewof kind of a group of experts
(08:54):
before we go into the detail.
But it seems to be all good news.
Mortgage Bankers Associationexpects 5.1% increase.
Zillow is predicting a 7%increase.
Fannie Mae 4.2% bump.
The National Association ofRealtors is very bullish.
They think it's going to be a9% jump, and they quote the 4.1
(09:16):
months worth of homes per saleon the market in 2025 as being
one of those big factors.
Again, it goes back to theinventory, so let's start with
NAR and look a little bit moredetailed into this.
They believe in 2025, existinghome sales could be 7% to 12%.
If we hit 12%, guys, it isgoing to be an absolute
tremendous year and in 2026,they have the numbers at 10% to
(09:39):
15%.
So that would be very good news.
Now Yun says the big factor hereis the improving job numbers
and recent gains in the stockmarket, meaning more Americans
will have money to be motivatedwith.
He's predicting in 2025, 2million plus new jobs and
another 2 million in 2026.
(10:00):
And that looks good for thehome market as well.
If that happens, when you lookat pending home sales only had a
3% year-over-year gain inSeptember.
He says that might actuallyshow that the worst is over.
We're actually starting to seethat little increase.
Inventory for both new andexisting homes in the US also
has grown by $70 million from1995, even though the home sales
(10:22):
remains at the same level as1995 levels.
That still is signaling there'sa pent-up demand.
So his forecast at the NAR, asI said, is 9% year over year and
you can see new home salesapproximately 11%.
So this is a good number to seefrom the NAR.
(10:43):
Now Realtorcom, on the otherhand, expects sales to be just
over 4 million new homes and asa result, they're only looking
at about a 1.5-year over-yearincrease not as bullish as NAR.
Now let's look at the US Newsand World Report.
They're expecting existing homesales will rise, but it will be
constrained.
They look at the years from thepandemic years forward and they
(11:06):
say after falling sharply in2023 and into 2024, that those
were some of the lowest levelsthat we've seen in almost 30
years.
They expect that these numberswill remain low as long as
mortgage rates are well over 6%,so they are tying the home
sales directly to the mortgagerates.
According to recent projections, they said the Federal Reserve
(11:28):
does not see inflation subsidingto 2% until early 2026, and
that will also have a downwardpush on sales.
They say this will mean higherbut gradually declining
short-term interest ratesthroughout 2025.
So not enough to overcome theconstraining effects to make the
existing home sales rise at ahigher level.
(11:49):
Now Redfin says home buyerdemand index, which tracks all
of your tours and servicesrequested from agents, was up 7%
year over year during the firstweek of December and that was
the highest level we've seensince September 2023.
So they think things are movingin the right direction and in
addition, when you look atFannie Mae's home purchase
sentiment index, it rose inNovember to the highest level
(12:12):
since February 2022.
And according to the US NewsWorld Report.
That is a sharp rebound fromthe all-time survey's lowest set
just over two years ago.
So we're starting to see demandincreasing.
Obviously, demand increases.
So will sales.
Forbes also offers some goodnews, they say after hitting a
14-year low in September,monthly existing home sales did
(12:34):
rise 3.4% in October and 2.9%year over year.
This puts your seasonallyadjusted annual sales right at 4
million 3.4% in October and2.9% year over year.
This puts your seasonallyadjusted annual sales right at
$4 million 3.96%.
That's up from the abysmal$3.83 million, not tremendously
through September, but marks thefirst annual sales increase
since July 2021.
So that is some good movementas well.
(12:56):
Now back to Redfin.
They have a little bit more.
Redfin says there will be morehome sales in 2025 than 2024.
That's good news.
They're expecting home sales totick up next year, ending 2025,
with an annualized rate between4.1 and 4.4 million.
Remember, this year is right onfour, so that's not a real big
increase, but it is an increase.
This is about between 2% to 9%.
(13:18):
2% would suck.
9% would obviously be very good.
And they say the reason they'regiving you this very wide sales
range, which is not what theynormally do.
Usually they'll say 4% or 5%,not 2% to 9%, that's 7%.
That's like saying the weatheris either going to be 80 or 90
degrees here.
It's not that precise they'regiving you there.
But they say the higher housingcosts are going to continue to
(13:39):
price some buyers out of themarket, but on the other hand
there's a large amount ofpent-up demand.
So what's going to win thehigher housing costs or the
pent-up demand?
That's what's really going toaffect as to what sales will be
this year.
So hopefully the rates willcome down and we'll get both of
those.
And they gave a couple examples.
They said home buying demandjumped in the weeks after the
(14:01):
November election, despitemortgage rates sitting around 7%
.
They said that was partlybecause buyers were waiting for
the uncertainty of the electionto pass before making big
purchases.
Always cracks me up likesomebody's not going to buy a
house for four years becausetheir person doesn't win.
But they said it was alsopartly because many people felt
more financial confident withthe promises of the
Republican-led administration.
(14:21):
I'm not getting into politics.
I will tell you this.
It is very interesting.
For the first time in the yearsthat I've been doing this,
there is a lot more talk aboutpolitics in this than ever.
Usually, there's very little tono politics in this.
On the one hand, you have a lotof people that are, and these
experts are talking about theloosening of regulation, the
decreasing of the inflation, thepro-growth positions of the
(14:43):
president, and then you alsothen on the other side, have the
other side of the media saying,well, the possible tariff war
and the possible deportation ofillegal immigration is going to
push it all down.
So depending, I guess, on whichside of the aisle you sit, as
to whether you believe that itwill make a difference, positive
or negative.
Business Insider said home saleswill surge.
(15:04):
They said the housing boom of2022 and 2023 was wiped out
after, because of the housingaffordability, all tanked.
But they're saying that theybelieve the mortgage rates will
go lower and higher supply isgoing to spark a turnaround in
our housing industry.
And they quote Leah Perea, whois our good friend over at EXP,
saying that he expects a 10%increase next year, and I think
(15:28):
Business Insider is going alongwith that.
They believe that DonaldTrump's policies will have a
tailwind for sales activities.
According to their economists,they're expecting tax cuts and
deregulations and that will spurthe market Again.
I'm not getting into politicshere.
I'm just telling you what theseso-called experts are saying.
Moneycom says home sales overthe past two years have been
(15:51):
sluggish only about 4 millionunits sold.
Compare that to a typicalmarket of around 5 million home
sales.
They think if the current trendcontinues, those numbers should
improve into 2025 due to risinginventory and more moderating
financing costs.
Cnbc says you also can expectmore sales in 2024.
They believe pent-up demand isgoing to drive the transactions.
(16:13):
They say people have waitedlong enough.
People need to move on withtheir lives.
They found new jobs.
Housing is more suitable fortheir lifestyle.
Their life changes and theywill be hitting the market.
So that is certainly good tosee.
And then, finally, yahooFinance says the housing market
will in fact stabilize.
(16:33):
They quote Tammy Carter fromEngel and Volkers in Atlanta
saying they expect a period ofstabilization and modest growth,
with home prices will likelygrow slower, which will increase
the demand, and she believesthat prices should remain flat
and we should see an increase insales.
So the general sense on salesis we should have more.
(16:55):
Everybody's predicting between2% to 10%.
I personally think we'll seebetween 5% and 6%, so we'll see
how that plays out.
Now let's move over to our nextissue, which is interest rates.
And in general we're going totalk about the National
Association of Realtors.
They're saying interest ratesin 25% and in 26%, to be near 6%
(17:18):
, somewhere in that low 6 rangethe lock-in effect will continue
to lessen.
As you all know, the lock-ineffect is that people have low
mortgages so they don't want tosell and they believe that's
going to end.
And they cite some researchhere that says 84% of homeowners
had mortgage rates under 6%.
That's going to fall to lessthan 75% by the end of the year
(17:41):
and so that will have alessening effect on that lock-in
rate.
As Laura Shun says, people havemarriages, growing families,
job changes, retirements, deathand more and that's just simply
going to take over.
That precedent is going to takeover the lower mortgage rates.
And I think he's right.
Life goes on and as much as youlike that lower rate, if you've
outgrown your house you've gotto move to a larger house.
(18:03):
So I think we will see that aswell and if the economy does
continue to improve, then morepeople have money in their
pockets and they can continue.
The USA Today cites Redfin andFannie Mae.
They cite Redfin sayingmortgage rates are likely to
remain in the high sixesthroughout 2025, but they
(18:25):
believe the average for the yearwill average out around 6.8.
So they're thinking close to 7.
Fannie Mae Impulsenomics LLCsays that consumers should
expect mortgage rates to remainelevated but modestly decline
over the course of the year downto what they believe will be
6.3.
That's also what Realtorcomsays and Mortgage Bankers
Association also says 6.4.
Az Big Media says that theybelieve that, due to the
(18:48):
aggressive rate hikes in 2023and 2024, that that's going to
all settle down and while theydon't expect a return to the
ultra-low rates of 2021, they dobelieve a modest decrease to
get you around 6% is wherethey're looking at, as I
mentioned earlier, the mortgagebankers.
They're very optimistic.
By spring of 2025 that factorswill line up and we'll see
(19:12):
increase in inventories and wecould see some decreases in
mortgage rates.
According to US News, they saidthat they believe that death,
divorce and debt the big threeDs are going to affect people
getting out of this rate lockissue and that more people will
start buying houses and thatinterest rates will continue to
(19:32):
come around and they believethat that will actually drive
sales and the rates will comedown.
Cnbc says they're expecting abumpy and volatile year for
mortgage rates.
I'm down.
Cnbc says they're expecting abumpy and volatile year for
mortgage rates.
The experts which they'vetalked to said it will be bumpy
for the entire year and probablyhover around the low 6% range.
(19:53):
Freddie Mac says their average30-year fixed rate has ranged
from 6.08% to 7.4% over the 52weeks and they believe that
there are a lot of things goingon in terms of budget deficit.
There's less money available,the government's borrowing much
money and, as a result, thelarge budget deficit will
prevent mortgage rates fromgoing much below what they are
(20:16):
now.
Narda, cap mortgage rates havebeen all over the place and they
believe that there will beconstant uncertainty in mortgage
rates that everybody needs toprepare for Now.
Ramsey Solution we talked aboutthem earlier.
They said they expect alowering of the funds rate to
continue, which will eventuallyaffect the mortgage rates will
(20:36):
continue to go down, but theybelieve that will be very slow.
As I mentioned, redfin believesin the high sixes 6.8.
Zillow Mortgage expects an ease, but it's a remain volatile as
well.
Our educated guess is thatmortgage rates will be lower by
the end of 2025 than they willbe at the start of the year,
with a possible volatility inbetween.
So they're expecting it to be alot like 24, where rates go up
(20:59):
and down throughout the year.
Business insiders think theywill say that rates will stay
above six.
They will not get anywhereclose to the historic lows, but
they do believe next year'seconomy will be typified by
lower interest rates and steadygrowth.
And then, lastly, yahoo Financesays that mortgage rates could
drop finally in 2024.
Fannie Mae predicts that,however, that they're going to
(21:21):
remain around 7% through 2024and then start easing down from
there in 2025.
So what you're seeing iseverybody believes in the 6s,
whether it's upper 6s or high 6s, they don't know.
I'm going to lean more towardthe low 6s.
I don't think we'll get intothe 5s.
It may dip in the 5s for ashort period of time.
My prediction is 6.25 will bekind of where we average out.
(21:43):
So now let's talk aboutinventory.
There's not as much oninventory to go through.
The general consensus has beenthat the supply is tight and
it's going to continue to betight because a lot of things
are against us in this.
In general, what we're seeingis, despite the fact we have
more resale and new homes thatare in the market, the for-sale
inventory still remains, afterall this time below the
(22:06):
pre-COVID averages, according toFreddie Mac, and likely these
headwinds are because of theultra-low mortgage rates that
people were locked into anddidn't want to get out of Then.
Demand simply was outpacing thehousing supply and the mortgage
rates obviously will continueto have an effect on that,
whether those rates go up ordown.
(22:27):
So, according to Rick Sarga,who is the CEO of CJ Patrick
Company, which is a marketintelligence and business
advisory firm, he says I don'texpect to see a meaningful
increase in the supply ofexisting homes for sale until
mortgage rates are back downaround the 5% range, and we've
already said we don't believethat's going to happen in 2025.
So we could be in for a longwait there.
(22:49):
Now, on the other hand, theNational Association of Realtors
says that housing inventorieshave been making sizable gains,
with listings up 20% annually inOctober, and their economists
are expecting an upswing tocontinue in 2025, because they
believe more of these homesellers and homeowners have been
delaying sales and they'refinally getting motivated and
(23:12):
mortgage rates stabilizing andimproving market conditions is
having a big effect on that.
In fact, they believe they'reprojecting that the historic
annual average of 1.5 millionunits over the next couple of
years by the home builders willalso ease some of that concern.
Now the US News and WorldReport says that this housing
efficiency is going to lastthroughout the 2020s and that
(23:36):
the pin of demand is about 4.5million homes.
And so, even if our builderswere willing to produce the
supply, they've got to find theland, get through all the
regulations, the skilled labor,find the materials, financing,
and that's just not going to bean easy and quick fix.
Business Insider says themarket's going to be very high
on housing supply, so theyactually think that the supply
(23:58):
is going to have a sizableincrease in home and apartment
supply.
An 11.7% jump in existing homeinventory and a 13.8% surge in
single-family home starts willusher in what they call the
first balanced housing market innine years, and that's
according to Realtorcom.
Now think about that.
If that is to happen, whatwould that mean?
(24:19):
It means we would have a marketwhere neither the buyer nor the
sellers have a disproportionateleverage against the other.
In 2025.
We would have an equal marketfor the first time in almost a
decade.
Additionally, business Insiderexpected new single-family homes
are expected to reach at least$1.1 million, which would be the
most since 2006, and thatshould also help with the
(24:40):
inventory.
Moneycom says that while theinventory remains still below
pre-pandemic levels, it's slowlyimproving.
According to the FederalReserve, there was a 4.3-month
supply of active listings in themarket in September and just to
compare that for you, inJanuary of 2022, we had a
1.6-month supply, so almostthree times where we were almost
(25:03):
three years ago.
Ramsey Solutions says that whenit comes to the housing
inventory for 2025, things arecurrently looking up.
October 2024 marked the 12thstraight month of inventory
growth and even better news wasthe number of homes on the
market in October was 29.2%higher than a year earlier.
(25:23):
That's insane.
That's really good.
And if inventory keepsincreasing, we don't believe
it'll be anywhere near pre-COVIDlevels.
So don't get your hopes up toomuch that it's going to be a
major price adjustment.
But they do believe it's greatsigns to see that the market
overall is getting healthier.
Overall, buyer demand hasstayed steady over the last two
years, but since 2022, demandhas gone up during the summer
(25:45):
and down during the winter.
We could see demand increase in2025 if those interest rates
continue to fall.
And then, lastly, in thissection here, az Big Media says
a persistent housing inventoryshortage will remain to be the
defining characteristic, thatwe'll see some improvements.
We expect inventory levels toincrease by 10% to 15% compared
to 2024, but still remain belowhistoric averages.
(26:07):
I agree with AZ Big Media I cansee a 10% to 15% increase in
the inventory levels, but Istill think it will be in that
three to four-month range whichwill be below our historic
levels.
All right, let's move now overto our next to last topic, which
is home prices.
So with home prices, let's talkabout that in general.
(26:29):
First, the National Associationof Realtors.
Their medium home price, theysaid in 2025 would go up 2% to
$410,700, and again 2% in 2026to $420,000.
Goldman Sachs predicts a 4.4%increase in 2025, which is down
from 4.5% in 2024.
(26:51):
Business Insider predicts a1.3% to 3.6% increase from 2024,
while Zillow predicts a 2.9%increase from October 2024 to
October 2025.
The USA Today Red Fins expects a4% rise in median home sales
prices.
Fannie Mae is forecasting a3.8% gain.
(27:13):
The National BankersAssociation is expected of a
gain of just 1.5%.
Looking at it a little bit morein detail, when you look at
what Forbes, they believe thatthe prices over the last five
years have surged nearly 40%.
Principal and interest paymentsare currently 82% higher than
they were before COVID.
When you add property taxes andinsurance, it's very
(27:34):
understandable why homeownership is completely out of
reach for many people.
However, their experts believethe recent slowdown in price
growth is an encouragingindicator that this trend is now
tilting in favor of the buyersand will likely persist into
2025.
Forbes is saying under theirhousing forecast, the US home
prices posteda 3.9% annual gainin September, down from a 4.2%
(27:58):
annual growth in August, andtheir chief economist believes
that they will continue to seecooling and it will likely
continue through mid-next yearto slow to a 2.3% increase by
August of 2025.
A little bit more detailed intoGoldman Sachs.
Their analysts are expecting anincrease in the forecast of US
home prices to 4.5% this yearand 4.4% in 2025.
(28:22):
And their estimates previouslywere 4.2% and 3.2% respectively,
back in April.
Yahoo Financing says that theybelieve prices could finally
stabilize.
It doesn't look like they'lldrop in 2025.
Narada says that the Zillowforecast of 2.6% is their home
(28:42):
value growth in 2025, and thatis similar to what they saw in
2024.
Redfin is predicting 4% in 2025.
They believe that prices willrise at a pace similar to those
of the second half of 2024because they don't expect
there'll be enough new inventoryto meet demand.
Zillow has home values going upmodestly.
Home values nationally areforecasted to grow at about 2.6%
(29:04):
.
A softening that would bewelcome news for many stressed
home buyers.
Cnbc also says they expect homeprice growth will return to
pre-pandemic levels and theybelieve will rise about 4%.
That's going to be thenormalization as compared to
accelerated growth we saw lastyear through what we last saw in
2020.
(29:25):
So everybody is expecting agrowth in prices, but not a
dramatic growth.
I think the 2% to 3% isprobably very accurate.
And so this brings us to thefinal issue, which I'll just
call other issues that are goingto affect our market.
Obviously, one of the bigthings that were cited by the
expert were the real estatecommission procedures will
change.
Again, they're still predictingthe commissions will go down.
(29:46):
I think that's crap.
I don't see any evidence thatcommissions are going to go down
at all.
Cost of homeownership is goingto be the biggest factor moving
forward, and it's not justmortgage rates, it's property
taxes, home insurance,maintenance and things of that
nature that are just pushing thepeople out of the ability to
buy a house.
We're also going to see adifferent type of buyer emerging
(30:09):
over 2025.
You're going to see more andmore buyers skipping out on
mortgages altogether.
In fact, 31% of repeat buyerspay all cash for their next home
purchase.
First-time homebuyers aregetting older.
The median age and this willblow your mind of a first-time
homebuyer is now 38 years old.
That's an all-time high.
Think back when you bought yourfirst house, how old you were.
(30:31):
You probably were not 38 yearsold.
25% of all first-timehomebuyers are using gift funds
or loans from a friend.
20% are taking money out offinancial assets like stocks,
401k, cryptocurrency.
7% are using inheritance.
All of those are record highs.
First-time homebuyers arecoming up with the highest down
payment in nearly 30 years,which is 9%, in order to afford
(30:53):
the higher home prices.
You're also seeing buyerspooling their money.
Multi-generational householdsnow have surged all-time high of
17% over the past year.
Single women buyers continue tooutpace single men buyers.
We have seen a tremendous dropin marriage rates, which is
terrible for our society andthat has triggered more
consumers entering the housingmarket on their own.
(31:14):
Single women held a 24% shareof home purchase market over the
past year.
Single men was at 11.
So what we're seeing is atremendous change in what is our
typical buyer, and you'll needto plan on that when you are
creating your marketingstrategies.
So there is your predictions bythe experts for 2025.
(31:37):
Overall, it looks fairly good.
It looks like home sales willgo up.
I love the very aggressivenumbers of NAR.
Looking at that 8%, 9%, 10%range.
If that happens, we're allgoing to have a stellar year.
House prices will stay the sameor go up slightly, so that will
also be good for everybody.
Inventory should go up.
That's going to be good for ourbuyers and mortgage rates
(31:59):
unfortunately don't look likethey're going to go down a whole
lot, but if we can get them outof the sevens and get them
steady in the low sixes, I thinkthat will also trigger a buying
response.
So, overall, the predictions for2025 look good.
I believe 2025 is going to be avery good year.
We've suffered through 23 and24 being just kind of eh kind of
years, and I think this iswhere we're going to finally see
(32:21):
the big growth back to where wewant to be.
So buckle up, get ready, getyour planning done, be ready for
2025.
Let's hit the ground rolling.
And, of course, the best andsmartest advice I could ever
give you is to use Black CatoPicker and Cashline on all those
closings to make sure they getclosed and they get closed on
time.
That's what we do.
Y'all have a great weekend.
(32:41):
Come back and see us again nextweek for another episode of
Dish and Dig.
Y'all take care.
This is Dish and Dirt with Gary Pickren, south
Carolina's only podcastdedicated to the real estate
agent craft.
And now the host of Dish andDirt, gary Pickren.
And greetings, welcome backeveryone to another episode of
Dish and Dirt.
I'm your often opinionated butrarely wrong host, gary Pickren,
coming to you from thebeautiful Columbia, south
Carolina, offices of Blair CatoPickrenan this the second week
(00:26):
of 2025.
Big news on the horizon we'regoing to share with you here in
just a minute about Dish andDirt, but before we do that,
let's remind you of the fourthannual Real Estate Success
Summit coming up here January29th in Columbia, south Carolina
, at the Central Energy Building.
Tickets are on sale now and bycoming to this event, you're
(00:47):
going to get to see some of thebest speakers there is.
You get to see Chelsea Pites,who has been on Inman News and
Housing Wire, keller WilliamsC21.
You name the group.
She's spoken to them before.
In fact, she's named one of thetop marketers in the entire
industry by Inman News.
She is a beast when it comes tomarketing.
We also have from oh SnapSocial, one of our good friends,
(01:10):
carla Nancron, and then BillSabata is coming back from Close
Simple.
So we've got an incrediblelineup of big host guests, and
then we also have a lot ofsmaller TED Talk sections going
on during the session as well,and so you're going to leave
there with a lot, a lot ofaction items and good work put
into place.
Now you can get your ticketscheck in the link below.
You can also go to blaircatocom, click on the button at the top
(01:33):
that says Summit and order yourtickets directly.
It's got the whole lineup, theschedule, everything is on our
website there.
If you buy tickets by the 12th,you can buy a ticket for $59.
By the 12th, you can buy aticket for $59.
You can also reserve your owntable of eight for $430.
So $430, you get eight ticketsand a table.
So a lot of you brokers incharge, a lot of you team
(01:54):
leaders, go ahead and get you atable.
I had one person yesterday tellme they're going to buy four
tables for their entirebrokerage.
So we're starting to selltables.
It's the best way to do it.
You don't have to worry aboutgetting there early.
You don't have to worry aboutsitting by somebody you might
not want to sit beside.
You can use it to bring peoplefrom your office, your team.
You can also use it to bringpeople you're recruiting to join
your office or team.
Hint, hint, hint.
So that's what we got on that.
(02:16):
But now the big news about DishDirt.
Hopefully you have our brandnew logo.
It is badass.
Katie Page, our new marketingcoordinator, designed the new
logo.
We're very excited about thatnew logo.
And now, if you're listening toDish and Dirt through Buzzsprout
as your podcast platform,you'll see in the notes a place
(02:38):
where it says text us.
You can click on that button.
You can send a direct textmessage to Dish and Dirt with
your comments, questions orideas for another show.
But the biggest news is the 200episode t-shirts are done and
we're really excited.
We'll be able to give you aDish and Dirt podcast t-shirt.
(03:00):
So how do you get them?
We've got 200 t-shirts to giveaway to you guys, and how you
get them is you have tosubscribe to Dish and Dirt
Podcast on Instagram.
So go to Instagram, search Dishand Dirt Podcast.
All one word, no apostrophe.
It's D-I-S-H-I-N-D-I-R-TPodcast, all one word.
Go ahead and subscribe.
(03:20):
Go ahead and subscribe and then, in the Instagram podcast page,
direct message us the size ofthe shirt you want.
Our sizes are limited.
We'll try to accommodateeverybody we can and which one
of our eight offices you wouldlike to pick the shirt up from.
Remember, in the upstate wehave Spartanburg, greenville and
Malden.
In the Midlands we haveColumbia, lexington, chapin.
(03:49):
In the PD area we have Camdenand we have Myrtle Beach.
If you guys in CharlotteCharleston, sumter, if you will
let me know where you're fromand that you can't come pick up
the shirt in one of our offices,I will try my very best to put
a package of the shirts togetherafter a couple of weeks and
send them, hopefully, to thelocal Realtor Association there
or somebody we know in thosetowns so that you can pick them
(04:11):
up there.
We don't want to leave you out,particularly our guys up in
Charlotte.
I don't know if you all knowthis I've never talked about it
before but the second biggestnumber of listeners of this
podcast on a weekly basis comefrom the Charlotte area, where
Blair Cato does not even have anoffice.
So we welcome you Charlotteguys, and if y'all want to get a
shirt, let me know.
We'll figure out a way to sendup some shirts up to the
(04:31):
Charlotte area.
We may send them to one of ourlawyer friends up there and let
you pick them up at her office,but we'll figure out a way to
get that done.
Let's go ahead now and look at2025.
Before we go through theindividual items I want to talk
about today, I do think it'simportant for this year's
prediction to look at it in thegeneral sentiment of what these
experts think about 2025,particularly in light of the
(04:54):
completion of 2024.
And I think if you look at NARthe National Association of
Realtors and how they succinctlysummarize what they believe
2025 is, I think it kind of setsthe pace for what we'll be
talking about today.
Lawrence Young, who is theNAR's chief economist I've seen
him speak several times.
He says homebuyers will havemore success next year.
(05:16):
The worst of the affordabilitychallenges are over, as more
inventory, stable mortgage ratesand continued job and income
growth will pave the way formore Americans to achieve
homeownership.
Ramsey Solutions says if youwere concerned about a potential
crash in 2025, you don't haveto worry about that.
You can put those worries tobay that there will not be a
(05:38):
crash at all.
The main reason they believethat is prices are not going to
drastically come down anytimesoon.
In fact, they quote the FederalHome Loan Mortgage Corporation
expectations of a price growthin 2025 is the reason why we are
going to avoid any type ofcrash.
The main thing they want you toknow about the housing market
is that home prices aredetermined by inventory,
(06:00):
obviously known as supply anddemand, and that's going to keep
a potential crash from nothappening.
Forbes, on the other hand, theyhave reported that for the best
possible outcome, we have tofirst see what the inventories
of home sales will be andwhether or not that will be
considerably higher.
Keith Gumbinger of HSHcom.
(06:21):
He tells Forbes that additionalinventory would ease the upward
pressure of home prices,leveling them off and perhaps
helping people settle back in,helping these rates settle back
in from peak or near peak levels.
They also, in that same articleby Forbes.
They discuss mortgages and howthat's affecting the general
market.
Obviously, mortgage rates, intheir belief, need to continue
(06:43):
to decline.
They've seen some movement inthe last month, but not very
great movement, but experts arestill, according to Forbes, very
hopeful that we're going to seemovement and great improvement
into the next year.
Obviously, gumbinger says thatas rates cool off, so will your
surge in demand, and as yoursurge in demand comes, it could
wipe out the inventory if thathappens too quickly.
(07:06):
Most important aspect thateverybody seems to be talking
about is this housing supply,which everybody says is the key
to the recovery.
They see little risk, however,the mortgage rates cooling off
too quickly.
They think it will be continuedsteady decrease and they will
continue to sound the alarmabout historical low inventories
, particularly as you havemillennials and other young
(07:27):
adults finally striving to getinto the housing market.
Freddie Mac, the economic andhousing research group at
Freddie Mac, say that theyanticipate mortgage rates to
gradually decrease in 2025.
And that will loosen up thelock-in effect and that will
obviously increase inventory andboosting sales.
So what you're seeing is, as ageneral sense, the main concern
(07:50):
is going to be inventory.
As the inventory goes, thehousing supply will be the
biggest obstacle that everybodyhas to overcome in this housing
market recovery.
If the inventory can expand,then obviously the effect on
home sales and everything elsewill fall right into place.
So today, what we're going to dois we're going to look at five
areas what are the expertstelling us about sales?
(08:12):
What are they telling us aboutmortgage rates, the inventory,
house prices, and then I callthe others, the others.
There's some other issues thatwe have to talk about, but I
want to start today with homesales, and let's talk about what
the so-called experts aretelling us.
First of all, about home sales.
So the question on everyone'smind as we enter into 2025, well
(08:32):
is will home sales rise?
We anticipated that 2023 wasthe bottom of the market, and
what we found is that 2024 waskind of still the bottom of the
market as well.
There was not this greatimprovement in sales numbers
from 23 to 24.
And so are we looking at moreof the same, or can we look into
some expectations?
I'll give you a brief overviewof kind of a group of experts
(08:54):
before we go into the detail.
But it seems to be all good news.
Mortgage Bankers Associationexpects 5.1% increase.
Zillow is predicting a 7%increase.
Fannie Mae 4.2% bump.
The National Association ofRealtors is very bullish.
They think it's going to be a9% jump, and they quote the 4.1
(09:16):
months worth of homes per saleon the market in 2025 as being
one of those big factors.
Again, it goes back to theinventory, so let's start with
NAR and look a little bit moredetailed into this.
They believe in 2025, existinghome sales could be 7% to 12%.
If we hit 12%, guys, it isgoing to be an absolute
tremendous year and in 2026,they have the numbers at 10% to
(09:39):
15%.
So that would be very good news.
Now Yun says the big factor hereis the improving job numbers
and recent gains in the stockmarket, meaning more Americans
will have money to be motivatedwith.
He's predicting in 2025, 2million plus new jobs and
another 2 million in 2026.
(10:00):
And that looks good for thehome market as well.
If that happens, when you lookat pending home sales only had a
3% year-over-year gain inSeptember.
He says that might actuallyshow that the worst is over.
We're actually starting to seethat little increase.
Inventory for both new andexisting homes in the US also
has grown by $70 million from1995, even though the home sales
(10:22):
remains at the same level as1995 levels.
That still is signaling there'sa pent-up demand.
So his forecast at the NAR, asI said, is 9% year over year and
you can see new home salesapproximately 11%.
So this is a good number to seefrom the NAR.
(10:43):
Now Realtorcom, on the otherhand, expects sales to be just
over 4 million new homes and asa result, they're only looking
at about a 1.5-year over-yearincrease not as bullish as NAR.
Now let's look at the US Newsand World Report.
They're expecting existing homesales will rise, but it will be
constrained.
They look at the years from thepandemic years forward and they
(11:06):
say after falling sharply in2023 and into 2024, that those
were some of the lowest levelsthat we've seen in almost 30
years.
They expect that these numberswill remain low as long as
mortgage rates are well over 6%,so they are tying the home
sales directly to the mortgagerates.
According to recent projections, they said the Federal Reserve
(11:28):
does not see inflation subsidingto 2% until early 2026, and
that will also have a downwardpush on sales.
They say this will mean higherbut gradually declining
short-term interest ratesthroughout 2025.
So not enough to overcome theconstraining effects to make the
existing home sales rise at ahigher level.
(11:49):
Now Redfin says home buyerdemand index, which tracks all
of your tours and servicesrequested from agents, was up 7%
year over year during the firstweek of December and that was
the highest level we've seensince September 2023.
So they think things are movingin the right direction and in
addition, when you look atFannie Mae's home purchase
sentiment index, it rose inNovember to the highest level
(12:12):
since February 2022.
And according to the US NewsWorld Report.
That is a sharp rebound fromthe all-time survey's lowest set
just over two years ago.
So we're starting to see demandincreasing.
Obviously, demand increases.
So will sales.
Forbes also offers some goodnews, they say after hitting a
14-year low in September,monthly existing home sales did
(12:34):
rise 3.4% in October and 2.9%year over year.
This puts your seasonallyadjusted annual sales right at 4
million 3.4% in October and2.9% year over year.
This puts your seasonallyadjusted annual sales right at
$4 million 3.96%.
That's up from the abysmal$3.83 million, not tremendously
through September, but marks thefirst annual sales increase
since July 2021.
So that is some good movementas well.
(12:56):
Now back to Redfin.
They have a little bit more.
Redfin says there will be morehome sales in 2025 than 2024.
That's good news.
They're expecting home sales totick up next year, ending 2025,
with an annualized rate between4.1 and 4.4 million.
Remember, this year is right onfour, so that's not a real big
increase, but it is an increase.
This is about between 2% to 9%.
(13:18):
2% would suck.
9% would obviously be very good.
And they say the reason they'regiving you this very wide sales
range, which is not what theynormally do.
Usually they'll say 4% or 5%,not 2% to 9%, that's 7%.
That's like saying the weatheris either going to be 80 or 90
degrees here.
It's not that precise they'regiving you there.
But they say the higher housingcosts are going to continue to
(13:39):
price some buyers out of themarket, but on the other hand
there's a large amount ofpent-up demand.
So what's going to win thehigher housing costs or the
pent-up demand?
That's what's really going toaffect as to what sales will be
this year.
So hopefully the rates willcome down and we'll get both of
those.
And they gave a couple examples.
They said home buying demandjumped in the weeks after the
(14:01):
November election, despitemortgage rates sitting around 7%
.
They said that was partlybecause buyers were waiting for
the uncertainty of the electionto pass before making big
purchases.
Always cracks me up likesomebody's not going to buy a
house for four years becausetheir person doesn't win.
But they said it was alsopartly because many people felt
more financial confident withthe promises of the
Republican-led administration.
(14:21):
I'm not getting into politics.
I will tell you this.
It is very interesting.
For the first time in the yearsthat I've been doing this,
there is a lot more talk aboutpolitics in this than ever.
Usually, there's very little tono politics in this.
On the one hand, you have a lotof people that are, and these
experts are talking about theloosening of regulation, the
decreasing of the inflation, thepro-growth positions of the
(14:43):
president, and then you alsothen on the other side, have the
other side of the media saying,well, the possible tariff war
and the possible deportation ofillegal immigration is going to
push it all down.
So depending, I guess, on whichside of the aisle you sit, as
to whether you believe that itwill make a difference, positive
or negative.
Business Insider said home saleswill surge.
(15:04):
They said the housing boom of2022 and 2023 was wiped out
after, because of the housingaffordability, all tanked.
But they're saying that theybelieve the mortgage rates will
go lower and higher supply isgoing to spark a turnaround in
our housing industry.
And they quote Leah Perea, whois our good friend over at EXP,
saying that he expects a 10%increase next year, and I think
(15:28):
Business Insider is going alongwith that.
They believe that DonaldTrump's policies will have a
tailwind for sales activities.
According to their economists,they're expecting tax cuts and
deregulations and that will spurthe market Again.
I'm not getting into politicshere.
I'm just telling you what theseso-called experts are saying.
Moneycom says home sales overthe past two years have been
(15:51):
sluggish only about 4 millionunits sold.
Compare that to a typicalmarket of around 5 million home
sales.
They think if the current trendcontinues, those numbers should
improve into 2025 due to risinginventory and more moderating
financing costs.
Cnbc says you also can expectmore sales in 2024.
They believe pent-up demand isgoing to drive the transactions.
(16:13):
They say people have waitedlong enough.
People need to move on withtheir lives.
They found new jobs.
Housing is more suitable fortheir lifestyle.
Their life changes and theywill be hitting the market.
So that is certainly good tosee.
And then, finally, yahooFinance says the housing market
will in fact stabilize.
(16:33):
They quote Tammy Carter fromEngel and Volkers in Atlanta
saying they expect a period ofstabilization and modest growth,
with home prices will likelygrow slower, which will increase
the demand, and she believesthat prices should remain flat
and we should see an increase insales.
So the general sense on salesis we should have more.
(16:55):
Everybody's predicting between2% to 10%.
I personally think we'll seebetween 5% and 6%, so we'll see
how that plays out.
Now let's move over to our nextissue, which is interest rates.
And in general we're going totalk about the National
Association of Realtors.
They're saying interest ratesin 25% and in 26%, to be near 6%
(17:18):
, somewhere in that low 6 rangethe lock-in effect will continue
to lessen.
As you all know, the lock-ineffect is that people have low
mortgages so they don't want tosell and they believe that's
going to end.
And they cite some researchhere that says 84% of homeowners
had mortgage rates under 6%.
That's going to fall to lessthan 75% by the end of the year
(17:41):
and so that will have alessening effect on that lock-in
rate.
As Laura Shun says, people havemarriages, growing families,
job changes, retirements, deathand more and that's just simply
going to take over.
That precedent is going to takeover the lower mortgage rates.
And I think he's right.
Life goes on and as much as youlike that lower rate, if you've
outgrown your house you've gotto move to a larger house.
(18:03):
So I think we will see that aswell and if the economy does
continue to improve, then morepeople have money in their
pockets and they can continue.
The USA Today cites Redfin andFannie Mae.
They cite Redfin sayingmortgage rates are likely to
remain in the high sixesthroughout 2025, but they
(18:25):
believe the average for the yearwill average out around 6.8.
So they're thinking close to 7.
Fannie Mae Impulsenomics LLCsays that consumers should
expect mortgage rates to remainelevated but modestly decline
over the course of the year downto what they believe will be
6.3.
That's also what Realtorcomsays and Mortgage Bankers
Association also says 6.4.
Az Big Media says that theybelieve that, due to the
(18:48):
aggressive rate hikes in 2023and 2024, that that's going to
all settle down and while theydon't expect a return to the
ultra-low rates of 2021, they dobelieve a modest decrease to
get you around 6% is wherethey're looking at, as I
mentioned earlier, the mortgagebankers.
They're very optimistic.
By spring of 2025 that factorswill line up and we'll see
(19:12):
increase in inventories and wecould see some decreases in
mortgage rates.
According to US News, they saidthat they believe that death,
divorce and debt the big threeDs are going to affect people
getting out of this rate lockissue and that more people will
start buying houses and thatinterest rates will continue to
(19:32):
come around and they believethat that will actually drive
sales and the rates will comedown.
Cnbc says they're expecting abumpy and volatile year for
mortgage rates.
I'm down.
Cnbc says they're expecting abumpy and volatile year for
mortgage rates.
The experts which they'vetalked to said it will be bumpy
for the entire year and probablyhover around the low 6% range.
(19:53):
Freddie Mac says their average30-year fixed rate has ranged
from 6.08% to 7.4% over the 52weeks and they believe that
there are a lot of things goingon in terms of budget deficit.
There's less money available,the government's borrowing much
money and, as a result, thelarge budget deficit will
prevent mortgage rates fromgoing much below what they are
(20:16):
now.
Narda, cap mortgage rates havebeen all over the place and they
believe that there will beconstant uncertainty in mortgage
rates that everybody needs toprepare for Now.
Ramsey Solution we talked aboutthem earlier.
They said they expect alowering of the funds rate to
continue, which will eventuallyaffect the mortgage rates will
(20:36):
continue to go down, but theybelieve that will be very slow.
As I mentioned, redfin believesin the high sixes 6.8.
Zillow Mortgage expects an ease, but it's a remain volatile as
well.
Our educated guess is thatmortgage rates will be lower by
the end of 2025 than they willbe at the start of the year,
with a possible volatility inbetween.
So they're expecting it to be alot like 24, where rates go up
(20:59):
and down throughout the year.
Business insiders think theywill say that rates will stay
above six.
They will not get anywhereclose to the historic lows, but
they do believe next year'seconomy will be typified by
lower interest rates and steadygrowth.
And then, lastly, yahoo Financesays that mortgage rates could
drop finally in 2024.
Fannie Mae predicts that,however, that they're going to
(21:21):
remain around 7% through 2024and then start easing down from
there in 2025.
So what you're seeing iseverybody believes in the 6s,
whether it's upper 6s or high 6s, they don't know.
I'm going to lean more towardthe low 6s.
I don't think we'll get intothe 5s.
It may dip in the 5s for ashort period of time.
My prediction is 6.25 will bekind of where we average out.
(21:43):
So now let's talk aboutinventory.
There's not as much oninventory to go through.
The general consensus has beenthat the supply is tight and
it's going to continue to betight because a lot of things
are against us in this.
In general, what we're seeingis, despite the fact we have
more resale and new homes thatare in the market, the for-sale
inventory still remains, afterall this time below the
(22:06):
pre-COVID averages, according toFreddie Mac, and likely these
headwinds are because of theultra-low mortgage rates that
people were locked into anddidn't want to get out of Then.
Demand simply was outpacing thehousing supply and the mortgage
rates obviously will continueto have an effect on that,
whether those rates go up ordown.
(22:27):
So, according to Rick Sarga,who is the CEO of CJ Patrick
Company, which is a marketintelligence and business
advisory firm, he says I don'texpect to see a meaningful
increase in the supply ofexisting homes for sale until
mortgage rates are back downaround the 5% range, and we've
already said we don't believethat's going to happen in 2025.
So we could be in for a longwait there.
(22:49):
Now, on the other hand, theNational Association of Realtors
says that housing inventorieshave been making sizable gains,
with listings up 20% annually inOctober, and their economists
are expecting an upswing tocontinue in 2025, because they
believe more of these homesellers and homeowners have been
delaying sales and they'refinally getting motivated and
(23:12):
mortgage rates stabilizing andimproving market conditions is
having a big effect on that.
In fact, they believe they'reprojecting that the historic
annual average of 1.5 millionunits over the next couple of
years by the home builders willalso ease some of that concern.
Now the US News and WorldReport says that this housing
efficiency is going to lastthroughout the 2020s and that
(23:36):
the pin of demand is about 4.5million homes.
And so, even if our builderswere willing to produce the
supply, they've got to find theland, get through all the
regulations, the skilled labor,find the materials, financing,
and that's just not going to bean easy and quick fix.
Business Insider says themarket's going to be very high
on housing supply, so theyactually think that the supply
(23:58):
is going to have a sizableincrease in home and apartment
supply.
An 11.7% jump in existing homeinventory and a 13.8% surge in
single-family home starts willusher in what they call the
first balanced housing market innine years, and that's
according to Realtorcom.
Now think about that.
If that is to happen, whatwould that mean?
(24:19):
It means we would have a marketwhere neither the buyer nor the
sellers have a disproportionateleverage against the other.
In 2025.
We would have an equal marketfor the first time in almost a
decade.
Additionally, business Insiderexpected new single-family homes
are expected to reach at least$1.1 million, which would be the
most since 2006, and thatshould also help with the
(24:40):
inventory.
Moneycom says that while theinventory remains still below
pre-pandemic levels, it's slowlyimproving.
According to the FederalReserve, there was a 4.3-month
supply of active listings in themarket in September and just to
compare that for you, inJanuary of 2022, we had a
1.6-month supply, so almostthree times where we were almost
(25:03):
three years ago.
Ramsey Solutions says that whenit comes to the housing
inventory for 2025, things arecurrently looking up.
October 2024 marked the 12thstraight month of inventory
growth and even better news wasthe number of homes on the
market in October was 29.2%higher than a year earlier.
(25:23):
That's insane.
That's really good.
And if inventory keepsincreasing, we don't believe
it'll be anywhere near pre-COVIDlevels.
So don't get your hopes up toomuch that it's going to be a
major price adjustment.
But they do believe it's greatsigns to see that the market
overall is getting healthier.
Overall, buyer demand hasstayed steady over the last two
years, but since 2022, demandhas gone up during the summer
(25:45):
and down during the winter.
We could see demand increase in2025 if those interest rates
continue to fall.
And then, lastly, in thissection here, az Big Media says
a persistent housing inventoryshortage will remain to be the
defining characteristic, thatwe'll see some improvements.
We expect inventory levels toincrease by 10% to 15% compared
to 2024, but still remain belowhistoric averages.
(26:07):
I agree with AZ Big Media I cansee a 10% to 15% increase in
the inventory levels, but Istill think it will be in that
three to four-month range whichwill be below our historic
levels.
All right, let's move now overto our next to last topic, which
is home prices.
So with home prices, let's talkabout that in general.
(26:29):
First, the National Associationof Realtors.
Their medium home price, theysaid in 2025 would go up 2% to
$410,700, and again 2% in 2026to $420,000.
Goldman Sachs predicts a 4.4%increase in 2025, which is down
from 4.5% in 2024.
(26:51):
Business Insider predicts a1.3% to 3.6% increase from 2024,
while Zillow predicts a 2.9%increase from October 2024 to
October 2025.
The USA Today Red Fins expects a4% rise in median home sales
prices.
Fannie Mae is forecasting a3.8% gain.
(27:13):
The National BankersAssociation is expected of a
gain of just 1.5%.
Looking at it a little bit morein detail, when you look at
what Forbes, they believe thatthe prices over the last five
years have surged nearly 40%.
Principal and interest paymentsare currently 82% higher than
they were before COVID.
When you add property taxes andinsurance, it's very
(27:34):
understandable why homeownership is completely out of
reach for many people.
However, their experts believethe recent slowdown in price
growth is an encouragingindicator that this trend is now
tilting in favor of the buyersand will likely persist into
2025.
Forbes is saying under theirhousing forecast, the US home
prices posteda 3.9% annual gainin September, down from a 4.2%
(27:58):
annual growth in August, andtheir chief economist believes
that they will continue to seecooling and it will likely
continue through mid-next yearto slow to a 2.3% increase by
August of 2025.
A little bit more detailed intoGoldman Sachs.
Their analysts are expecting anincrease in the forecast of US
home prices to 4.5% this yearand 4.4% in 2025.
(28:22):
And their estimates previouslywere 4.2% and 3.2% respectively,
back in April.
Yahoo Financing says that theybelieve prices could finally
stabilize.
It doesn't look like they'lldrop in 2025.
Narada says that the Zillowforecast of 2.6% is their home
(28:42):
value growth in 2025, and thatis similar to what they saw in
2024.
Redfin is predicting 4% in 2025.
They believe that prices willrise at a pace similar to those
of the second half of 2024because they don't expect
there'll be enough new inventoryto meet demand.
Zillow has home values going upmodestly.
Home values nationally areforecasted to grow at about 2.6%
(29:04):
.
A softening that would bewelcome news for many stressed
home buyers.
Cnbc also says they expect homeprice growth will return to
pre-pandemic levels and theybelieve will rise about 4%.
That's going to be thenormalization as compared to
accelerated growth we saw lastyear through what we last saw in
2020.
(29:25):
So everybody is expecting agrowth in prices, but not a
dramatic growth.
I think the 2% to 3% isprobably very accurate.
And so this brings us to thefinal issue, which I'll just
call other issues that are goingto affect our market.
Obviously, one of the bigthings that were cited by the
expert were the real estatecommission procedures will
change.
Again, they're still predictingthe commissions will go down.
(29:46):
I think that's crap.
I don't see any evidence thatcommissions are going to go down
at all.
Cost of homeownership is goingto be the biggest factor moving
forward, and it's not justmortgage rates, it's property
taxes, home insurance,maintenance and things of that
nature that are just pushing thepeople out of the ability to
buy a house.
We're also going to see adifferent type of buyer emerging
(30:09):
over 2025.
You're going to see more andmore buyers skipping out on
mortgages altogether.
In fact, 31% of repeat buyerspay all cash for their next home
purchase.
First-time homebuyers aregetting older.
The median age and this willblow your mind of a first-time
homebuyer is now 38 years old.
That's an all-time high.
Think back when you bought yourfirst house, how old you were.
(30:31):
You probably were not 38 yearsold.
25% of all first-timehomebuyers are using gift funds
or loans from a friend.
20% are taking money out offinancial assets like stocks,
401k, cryptocurrency.
7% are using inheritance.
All of those are record highs.
First-time homebuyers arecoming up with the highest down
payment in nearly 30 years,which is 9%, in order to afford
(30:53):
the higher home prices.
You're also seeing buyerspooling their money.
Multi-generational householdsnow have surged all-time high of
17% over the past year.
Single women buyers continue tooutpace single men buyers.
We have seen a tremendous dropin marriage rates, which is
terrible for our society andthat has triggered more
consumers entering the housingmarket on their own.
(31:14):
Single women held a 24% shareof home purchase market over the
past year.
Single men was at 11.
So what we're seeing is atremendous change in what is our
typical buyer, and you'll needto plan on that when you are
creating your marketingstrategies.
So there is your predictions bythe experts for 2025.
(31:37):
Overall, it looks fairly good.
It looks like home sales willgo up.
I love the very aggressivenumbers of NAR.
Looking at that 8%, 9%, 10%range.
If that happens, we're allgoing to have a stellar year.
House prices will stay the sameor go up slightly, so that will
also be good for everybody.
Inventory should go up.
That's going to be good for ourbuyers and mortgage rates
(31:59):
unfortunately don't look likethey're going to go down a whole
lot, but if we can get them outof the sevens and get them
steady in the low sixes, I thinkthat will also trigger a buying
response.
So, overall, the predictions for2025 look good.
I believe 2025 is going to be avery good year.
We've suffered through 23 and24 being just kind of eh kind of
years, and I think this iswhere we're going to finally see
(32:21):
the big growth back to where wewant to be.
So buckle up, get ready, getyour planning done, be ready for
2025.
Let's hit the ground rolling.
And, of course, the best andsmartest advice I could ever
give you is to use Black CatoPicker and Cashline on all those
closings to make sure they getclosed and they get closed on
time.
That's what we do.
Y'all have a great weekend.
(32:41):
Come back and see us again nextweek for another episode of
Dish and Dig.
Y'all take care.
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