Looking Ahead to 2025: What to Expect in the Housing Market

Prepared by Square Feet Appraisals in collaboration with Delaware Beaches Online

Data Source: Bright MLS 

A Shift in Consumer Sentiment
As we step into 2025, there’s a glimmer of optimism in the housing market. According to the Fannie Mae Home Purchase Sentiment Survey, consumers ended 2024 feeling more hopeful about homebuying and selling than they did the previous year. However, that optimism is not evenly spread.

• Only 1 in 5 consumers believes it’s a good time to buy a home.
• Nearly two-thirds think it’s a good time to sell.

Real estate professionals aren’t fully convinced yet. A Bright MLS survey of agents and brokers found that:

• Only 14% expect high seller activity in the first quarter of 2025.
• 37% expect strong buyer activity.

Despite hopes for a return to pre-pandemic market conditions, uncertainty still looms.

The Pent-Up Demand for Housing
The 2024 housing market saw fewer transactions than the long-term average. Many prospective buyers put their home searches on hold due to high mortgage rates, rising prices, and limited inventory. A Bright MLS survey found that 70% of agents had at least one client who paused their search out of frustration.

The top reasons buyers held back:

Mortgage Rates and Buyer Behavior
Mortgage rates have been volatile, leaving many buyers confused and hesitant. Despite the Federal Reserve cutting short-term interest rates, mortgage rates have not dropped as expected. Instead, they are being influenced by broader economic factors, including inflation expectations and investor sentiment.

Here’s what to expect in 2025:

• Mortgage rates are projected to gradually decrease but will remain unpredictable.
• Buyers will be opportunistic, jumping into the market when rates dip.
• A sharp drop in rates could trigger a wave of demand, increasing competition for available homes.

For buyers, timing will be everything. Staying informed and prepared to act quickly when rates drop will be key.

Looking Ahead
The 2025 housing market won’t be a return to “normal,” but it could offer opportunities for both buyers and sellers. Buyers who have been waiting on the sidelines may finally re-enter the market if rates and inventory improve. Sellers will need to stay informed and flexible, as shifting buyer demand could impact pricing and competition.

If you’re considering buying or selling in 2025, working with an experienced real estate professional will be crucial. Stay prepared, stay informed, and be ready to take advantage of market shifts as they happen.