(NewsNation) — If you’re looking to become a homeowner in the new year, Zillow’s latest market report predicts 2024’s mortgage rates will continue to impact the housing market.
The real estate marketplace predicts a “low and slow” decline in mortgage rates in 2025, potentially driving gradual growth in both home sales and price appreciation.
In the second half of 2024, a September dip in rates boosted home sales, with Zillow forecasting 4.06 million sales for the year. Home values are expected to rise 2.2% in 2025, similar to the 2.3% annual appreciation seen in November.
Additionally, Zillow forecasts about 100,000 more home sales in 2025 compared to 2024.
The report suggests that declining mortgage rates could encourage buyers to act quickly when an opportunity arises, as the housing market continues to normalize post-coronavirus pandemic.
“There’s a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path,” said Skylar Olsen, Zillow’s chief economist.
Zillow also noted that “total for-sale” inventory is gradually improving but remains dependent on further mortgage rates.
Olsen added that the winter months could offer a better chance for buyers to find deals, as competition has eased in 36 of 50 U.S. cities from October to November this year.