Year-End Housing Market Wrap-Up: Looking Back at 2024 and Ahead to 2025

This year has been anything but predictable in the housing market. Mortgage rates bounced around, inventory remained tight, and affordability challenges persisted for buyers and renters alike. But 2024 wasn’t without its bright spots. We saw signs of stabilization, increased buyer demand in the latter half of the year, and some progress on inventory issues.

At Nuvision, we understand that staying informed is the key to navigating a market like this. That’s why we provide these reports—so you can keep up with the latest trends, issues, data, and expert insights. As we close out 2024, let’s take a look at the key takeaways from the year and what we might expect heading into 2025, with insights from Zillow, Redfin, the National Association of Realtors, and Steven Thomas' Reports on Housing.

Zillow: Buyers Regain Some Ground as Inventory Slowly Improves

Mortgage rates took center stage in 2024, playing a huge role in how buyers, sellers, and renters navigated the market. Zillow’s forecast predicts rates will decline slowly in 2025, paving the way for modest growth in sales and home price appreciation. While 2024 is ending with 4.06 million home sales, 2025 is projected to see a slight bump to 4.16 million sales.

New listings increased from earlier in the year, with the gap to pre-pandemic levels narrowing. Total inventory also started to climb out of the deficit created during the pandemic, though it remains 26% below 2018–2019 norms. Winter shoppers may find opportunities as competition cools, with fewer bidding wars and more room for negotiations. Still, progress depends heavily on the path of mortgage rates.

Home values for 2024 were steady, with the typical U.S. home valued at $358,761. While values are still 111% higher than before the pandemic, monthly mortgage payments dropped 3.8% compared to last year. Zillow expects home values to grow by 2.2% in 2025 as more inventory enters the market.

Redfin: Post-Election Demand Drives Late-Year Momentum

As 2024 wrapped up, homebuying demand surged to its highest level since early spring. Mortgage rates dropped slightly after the election and a cooler-than-expected jobs report, spurring activity among both buyers and sellers. Redfin’s Homebuyer Demand Index rose 8% year-over-year, while pending home sales were up 4.1% from the same period in 2023.

Many sellers who had been waiting for the election’s uncertainty to pass are now jumping into the market, with new listings increasing by 7.9% year-over-year. Buyers are adjusting to the reality that mortgage rates will likely stay above 6% for the foreseeable future, with many moving forward despite high costs.

Redfin’s economists expect pent-up demand to drive more sales in 2025. However, rising home prices and rates near 7% will keep affordability top of mind, pushing some buyers toward renting instead.

National Association of Realtors: Stabilization Signals a Return to Opportunity

According to the National Association of Realtors (NAR), 2025 is shaping up to be a year of stabilization. Mortgage rates are expected to level out near 6%, creating opportunities for more buyers to re-enter the market. NAR projects that when rates drop below 6.5%, roughly 6.2 million households could afford a median-priced home.

Inventory is expected to improve further next year, thanks to new construction projects and more homeowners deciding to sell. However, even with these gains, supply will remain tight compared to pre-pandemic levels. Home prices are forecast to grow by 2% in 2025, marking a slowdown from the steep increases seen in recent years.

For buyers, this means a more balanced market with slightly better affordability, though the ongoing housing shortage will keep competition strong in high-demand areas.

Steven Thomas: No Crash in Sight Despite Concerns

Steven Thomas of Reports on Housing emphasizes that a crash in home values is not on the horizon. Tight inventory and over a decade of strict lending standards have kept the market stable, even during periods of economic uncertainty.

While many Americans continue to anticipate a housing crash, history has proven otherwise. Predictions of plummeting values during the Great Recession, the pandemic, and recent interest rate hikes never materialized. Limited supply is the key reason why housing values remain resilient.

As we head into 2025, Thomas notes that careful pricing and preparation will remain essential for sellers. Buyers, armed with better information and tools, are becoming increasingly selective. With inventory still historically low, the market will likely remain steady, even as affordability challenges persist.

Key Takeaways from December’s Housing Market Update

1. Home Sales Expected to Rise Slightly in 2025
• Zillow forecasts 4.16 million home sales in 2025, a modest increase from 4.06 million in 2024.
2. Home Values to Grow Steadily
• Home values are projected to rise by 2.2% next year, continuing the trend of slow, stable appreciation seen in 2024.
3. Inventory Levels Show Gradual Improvement
• While inventory remains 26% below pre-pandemic levels, it has shown steady improvement over the past year.
4. Mortgage Rates Likely to Stay High
• Rates are expected to remain in the high-6% range in 2025, which will continue to challenge affordability for many buyers.
5. Rents Continue to Climb
• The typical U.S. rent increased by 3.4% in November, with single-family rents rising 4.4% year over year.
6. Winter Market Offers Opportunities for Buyers
• Competition for homes is cooling, with only 27.8% of homes selling above list price in November, compared to higher percentages earlier in 2024.
7. Demand Rebounding Post-Election
• Redfin reports an 8% increase in their Homebuyer Demand Index year over year, as buyers adjust to the new normal of higher rates.
8. Pent-Up Demand Could Drive 2025 Sales
• Both Redfin and NAR predict an increase in home sales next year, fueled by demand that was held back in 2024.
9. Low Inventory Prevents a Market Crash
• Steven Thomas highlights that tight inventory and strong lending standards are key reasons why housing values remain stable, defying predictions of a crash.

Wrapping Up 2024 and Looking Ahead to 2025

The housing market in 2024 brought its fair share of challenges, from fluctuating mortgage rates to tightening inventory, but it also showed signs of stability and new opportunities, especially heading into the final months of the year. Navigating this complex market requires staying informed, and that’s why Nuvision is here—to provide you with clear insights, the latest data, and emerging trends.

Whether you’re buying, selling, or simply keeping a close eye on the market, we’re committed to helping you make confident, informed decisions. As we look ahead to 2025, Nuvision will continue delivering the updates you need to navigate the market and build the life you deserve.