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2024 housing market in review. What to expect in housing in 2025?

New headshot of Pacaso Co-Founder and CEO Austin Allison
Austin Allison
January 3, 2025
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I’m Austin,  CEO and Co-Founder of Pacaso. 
As 2024 came to a close, we watched changes that could impact both buyers and sellers. The year ended with home sales up, mortgage rates still elevated, and price growth slowing, leaving some optimism for the year ahead.Here’s a closer look at the latest trends as we close out the year and what’s ahead in 2025.

2024 in review 

1. Home sales surge at the end of ‘24

November saw a 6.1% year-over-year increase in sales, marking the largest gain since mid-2021. U.S. existing-home sales also rose 4.8% from the previous month, reaching a seasonally adjusted annual rate of 4.15 million—the highest level since March, according to the NAR. The recent increase in supply and sales offers a promising sign for improved market conditions in the year ahead.

2. Rate rollercoaster

While the Federal Reserve has cut short-term interest rates three times this year, 30-year mortgage rates are still holding above 6.5%, keeping buyers on the sidelines. For most of 2024, rates were lower than the previous year, but by the end of December, they were up 21 basis points annually. The average rate for a 30-year fixed mortgage with conforming loan balances (up to $766,550) edged up from 6.89% to 6.97%, as analyzed by CNBC housing experts.

3. Home price growth slow

Nationwide, home prices grew by 3.6% in October compared to the previous year, down from 3.9% in September. This marked the seventh consecutive month of slowing annual gains, as reported by the S&P CoreLogic Case-Shiller Index.

2025 Predictions

The outlook for 2025 is cautiously optimistic, according to experts from NAR, Zillow, Redfin, and Realtor.com. When it comes to mortgage rates, we might see a slight dip, but they’re likely to stay above 6%, keeping things challenging—but improving—for buyers. Inventory is also expected to improve. In fact, Realtor.com is predicting total listings could jump by up to 11.7% next year. As for home prices, they’re expected to keep rising, but at a much slower pace than in previous years.  We'll continue to check in with updates, and encourage you to contact us with any questions about a market of interest.

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