2025-2029 Housing Forecast: What Buyers and Sellers Can Expect

According to usnews.com, the housing market between 2025 and 2029 will likely experience slower increases in home prices and rents. Key factors shaping this will include the impacts of the pandemic's aftermath, the expansion of AI, and climate change costs, as well as potential shifts in immigration and tariffs. However, mortgage rates will play the biggest role in shaping the market. If rates remain high, home sales will primarily be driven by job and life changes. But if mortgage rates decline faster, pent-up demand could drive a return to more typical market volumes.

As of mid-2024, nearly 86% of homeowners have mortgage rates below 6%, but this percentage is shrinking. The demand for homes could rise as more homeowners consider selling due to life changes such as job relocation or the need for more space. Renovation is also becoming an appealing option for those who are hesitant to sell in this environment.

New home construction is another bright spot. With low existing home inventory, more buyers are considering newly built homes, making up around 30% of the housing inventory. Larger homebuilders are offering incentives like mortgage rate buydowns and covering closing costs to attract buyers.

The real estate commission landscape is shifting as well. New rules from the National Association of Realtors (NAR) are changing how commissions are structured, especially for luxury homes. This could lead to more negotiation opportunities and transparency in transactions.

As we look ahead, rising property taxes, home insurance, and maintenance costs will make the total cost of homeownership more significant. Homebuyers will need to factor in these costs, including HOA fees, which have been increasing. Despite these challenges, the demand for homes will remain strong, with a housing shortage expected to persist through the end of the decade, though supply will gradually improve.

In summary, home prices are likely to see moderate growth from 2025 through 2029, with demand driven by life changes, new construction, and more accessible homebuying options as mortgage rates potentially ease.

For more insights on the housing market and how to navigate upcoming changes, feel free to contact the Benson Group. We can help you make informed decisions for the years to come.

Source: realestate.usnews.com