Zillow: Activity Poised to Pick Up in 2025

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Zillow, Seattle, released its predictions for 2025, forecasting 2.6% home value growth next year and a more active housing market.

But, those hoping to buy or refinance may see a bumpy year and should be ready to move when conditions are right, the firm cautioned.

For existing-home sales, Zillow forecasted 4.3 million in the next year, up from 4.1 million in 2023 and a projected 4 million in 2024. More homes will come on the market, the report predicted, giving buyers more options.

Mortgage rates may see a number of up and down swings over the next year, with big refinancing booms during drops.

Zillow provides an analysis of “buyers markets”–where buyers have the upper hand in negotiations. Currently, most of those are in the Southeast U.S., but Zillow predicts more will pop up in the Southwest.

Another trend Zillow pinned for 2025 is home buyers increasingly being drawn to smaller homes as a more sustainable, affordable and desirable way to live. For example, Zillow is seeing the phrase “cozy” appear more in listings, up 35% in 2024.

Home values for small condos also are stabilizing after the fall in popularity during the pandemic.

Looking at the rental market, Zillow noted that rent growth has held steady and the share of rental listings offering some sort of concession–such as free parking or a period of free rent–is at a record high. The firm anticipates those concessions will begin to lessen as the multifamily construction boom begins to slow.

But, rent affordability is also on track to improve next year as long as wages continue to grow.