Weekly Housing Market Update: Get Ready for the First Balanced Market in Nearly a Decade in 2025

Homebuyers and sellers can slowly start to breath easy in 2025, with modest gains on the horizon in the next year.

Realtor.com’s 2025 Housing Forecast shows that there will be gains in both home prices and sales. And the biggest positive story for buyers is that we expect housing inventory to continue to grow in the year ahead which will mean the first full year of a balanced housing market since 2016.

This week, our key data covered the labor market as unemployment edged up and hourly wages climbed. Hiring rebounded in November, and hourly wages climbed 4.0%, faster than recent inflation. And while job openings are down from one year ago, they still remain relatively abundant. This gradual adjustment should clear the path for the Fed to continue normalizing monetary policy, and I expect another quarter point rate cut later in December, especially if inflation is moderate next week.

Mortgage rates dipped for a second week to 6.7%, pulling back from their recent highs as markets continue to calibrate expectations around the economic outlook and policy implications of the 2024 elections.

In housing, we saw pending and new home sales data—both of which are based on contract signings—move in opposite directions.

Pending home sales ticked up in October, climbing above the level from a year ago. But new home sales fell as lower mortgage rates in early October ushered in more existing homes for sale.

Patience is required from sellers as homes spent more time on the market. In November, Realtor.com housing data showed that the uptick in mortgage rates early in the month led to a smaller yearly gain in new sellers which could foreshadow a bit of a reversal in October’s pending home sales trend.

Realtor.com data also showed that rents fell further in October, but in total are down only about 2% from their 2022 peak. Rental supply that is already in the pipeline is expected to help hold rents back in 2025, especially in the South. In New York, rents continue to climb overall, but dropped in Manhattan where the monthly rent is enough to afford a $600,000 to $750,000 home in other areas of the country that are popular with Manhattan-based home shoppers.