This week, we are excited to share insights from the California Association of Realtors® (C.A.R.) on the 2025 Housing Market Forecast which was released just last week and was a featured keynote of the annual C.A.R, Conference and Expo in Long Beach. According to the C.A.R. report, we can anticipate a resurgence in California’s real estate activity as both buyers and sellers are likely to return to the market.
The first key point of the 2025 Forecast is that “Existing, single-family home sales are forecast to total 304,400 units in 2025, an increase of 10.5 percent from 2024’s projected pace of 275,400.”*
Secondly, home prices are projected to increase in 2025. “California’s median home price is forecast to climb 4.6 percent to $909,400 in 2025, following a projected 6.8 percent increase to $869,500 in 2024 from 2023’s $814,000.”
Third, mortgage interest rates are projected to be 5.90 Percent. Cue the celebration that mortgage rates are under 6 percent! For many homeowners, this is a mortgage rate that makes it tolerable to leave behind a 2-3 percent mortgage rate and instead purchase a home better suited to their current needs.
C.A.R. President Melanie Barker highlights the favorable conditions, stating, “An increase in homes for sale, along with lower borrowing costs, is expected to entice more buyers and sellers to enter the market in 2025.” This is particularly encouraging for first-time buyers as mortgage rates are projected to be at their lowest in over two years.
Housing supply is expected to improve modestly in 2025, with active listings anticipated to increase slightly above 10%. “Although inventory is expected to loosen as rates ease, demand will also increase,” explains C.A.R. Senior Vice President and Chief Economist Jordan Levine. He notes that this combination will keep the market competitive and drive prices higher.
As we move into 2025, the housing market looks poised for a revitalization, driven by improved mortgage interest rates and a growing housing inventory. Whether you’re considering buying, selling, or investing, this is a great time to discuss your options.
Here is one takeaway we received from Chief Economist Jordan Levine’s keynote: act now.
The best time to buy a house is when everyone is waiting on the sidelines to see what happens. This fall and winter are a unique opportunity for a home buyer to enter the market and purchase a home before the competition heats up.
If you have any questions or would like to explore your real estate opportunities, please don’t hesitate to reach out!
*Sources: California Association of Realtors® (C.A.R.) –https://www.car.org/aboutus/mediacenter/newsreleases/2024-News-Releases/2025forecast
