Home Prices Expected to Rise in 2025 and 2026, Says National Association of Realtors
The National Association of Realtors has forecasted a 2% increase in home prices for 2025, followed by an additional 2% increase in 2026. Lawrence Yun, the group’s economist, predicts that the median U.S. home price will reach $410,700 in 2025, up from $406,100 in November.
Yun mentioned that the growth in home prices might slow down in the coming years, allowing income to catch up with housing costs. He also expects the Federal Reserve to maintain a gradual approach to easing monetary policy in 2025.
According to the forecast, mortgage rates are expected to stabilize near 6% in 2025, becoming the “new normal.” This stabilization could attract more buyers to the market, with the association projecting 4.5 million existing-home sales in 2025.
Despite a national housing shortage, inventory levels are gradually improving, fueled by new construction projects and homeowners listing their properties. NAR anticipates increased construction activity, with housing starts reaching 1.45 million units in the next couple of years.
Yun believes that these factors will make it easier for home buyers to enter the market. He stated, “The worst of the affordability challenges are over as more inventory, stable mortgage rates, and continued job and income growth pave the way for more Americans to achieve homeownership.”
Syndicated with permission from The Center Square.
