Zillow: Narrow Growth Anticipated in 2025

(Image courtesy of Zillow; Breakout image courtesy of Jakub Zerdzicki/pexels.com)

Zillow, Seattle, predicts only about 100,000 more home sales in 2025, with home value growth at 2.2% over the course of the year.

Zillow noted that erratic mortgage rate movements weighed heavily on the market in 2024, and are poised to do so once again in 2025. However, Zillow forecasts that mortgage rates will slowly decline over the course of the year, leading to modest growth.

“There’s a strong sense of déjà vu on tap for 2025. We are once again expecting mortgage rates to get better gradually, and opportunities for buyers should follow, but be prepared for plenty of bumps on that path,” said Zillow Chief Economist Skylar Olsen. “Those shopping this winter have plenty of time to choose and a relatively strong position in negotiations.”

Zillow anticipates that year-end 2024 will reveal a grand total of 4.06 million home sales and predicts a total of 4.16 million in 2025.

Some measures of the housing market are trending closer to historical norms. For one, the flow of new listings is still 14% below pre-pandemic, but that’s a significant improvement over March, when that gap stood at 25%.

Total for-sale inventory stands about 26% below 2018-2019 pre-pandemic numbers, but that’s the smallest gap since September 2020.

The share of homes that sold for more than list price was below 28% in October, a downward trend that began in July.