Sign up to save your podcasts
Or
Share "US Housing in 2025: Navigating High Rates and Limited Inventory"
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
"US Housing in 2025: Navigating High Rates and Limited Inventory"
The US housing industry is facing a challenging year in 2025, with elevated mortgage rates and ever-rising home prices continuing to discourage potential homebuyers. According to Bankrate's latest national survey, the average rate on a 30-year mortgage was 7.08 percent as of January 8, 2025[1]. This, combined with limited housing inventory, is expected to keep the market under pressure.
Despite these challenges, there are signs of improvement. The National Association of Realtors (NAR) reported an increase in existing-home sales in November 2024, with home sales rising 4.8 percent year-over-year. This suggests that attitudes among buyers may be changing, with more entering the market as the economy continues to add jobs and housing inventory grows[1].
However, the lack of affordability and the continuation of the lock-in effect, where sellers are reluctant to sell due to high interest rates, will keep sellers on the sidelines, according to Selma Hepp, chief economist for CoreLogic[1]. The increase in inventory is expected to come primarily from new construction, as mortgage rates are not expected to fall enough to spur an increase in existing-home inventory[1].
Builder confidence in the market for newly built single-family homes was 47 in January, up one point from December, according to the NAHB/Wells Fargo Housing Market Index (HMI)[3]. However, sales expectations in the next six months fell six points to 60, partly due to the elevated interest rate environment.
In response to these challenges, builders are cutting home prices and using sales incentives. The latest HMI survey revealed that 30% of builders cut home prices in January, with an average price reduction of 5%[3]. The use of sales incentives was 61% in January, a share that has remained stable since last June.
The start of 2025 has been slow, with more available homes but less demand, according to Steven Thomas of Reports on Housing[4]. High mortgage rates and rising home prices are the main factors contributing to this slowdown.
In conclusion, the US housing industry is facing a tough year in 2025, with elevated mortgage rates and limited housing inventory expected to keep the market under pressure. However, there are signs of improvement, with an increase in existing-home sales and a rise in builder confidence. Builders are responding to these challenges by cutting home prices and using sales incentives. The industry will need to continue to adapt to these changing conditions to navigate the challenges ahead.
This content was created in partnership and with the help of Artificial Intelligence AI
Despite these challenges, there are signs of improvement. The National Association of Realtors (NAR) reported an increase in existing-home sales in November 2024, with home sales rising 4.8 percent year-over-year. This suggests that attitudes among buyers may be changing, with more entering the market as the economy continues to add jobs and housing inventory grows[1].
However, the lack of affordability and the continuation of the lock-in effect, where sellers are reluctant to sell due to high interest rates, will keep sellers on the sidelines, according to Selma Hepp, chief economist for CoreLogic[1]. The increase in inventory is expected to come primarily from new construction, as mortgage rates are not expected to fall enough to spur an increase in existing-home inventory[1].
Builder confidence in the market for newly built single-family homes was 47 in January, up one point from December, according to the NAHB/Wells Fargo Housing Market Index (HMI)[3]. However, sales expectations in the next six months fell six points to 60, partly due to the elevated interest rate environment.
In response to these challenges, builders are cutting home prices and using sales incentives. The latest HMI survey revealed that 30% of builders cut home prices in January, with an average price reduction of 5%[3]. The use of sales incentives was 61% in January, a share that has remained stable since last June.
The start of 2025 has been slow, with more available homes but less demand, according to Steven Thomas of Reports on Housing[4]. High mortgage rates and rising home prices are the main factors contributing to this slowdown.
In conclusion, the US housing industry is facing a tough year in 2025, with elevated mortgage rates and limited housing inventory expected to keep the market under pressure. However, there are signs of improvement, with an increase in existing-home sales and a rise in builder confidence. Builders are responding to these challenges by cutting home prices and using sales incentives. The industry will need to continue to adapt to these changing conditions to navigate the challenges ahead.
This content was created in partnership and with the help of Artificial Intelligence AI
View all episodes
By Inception Point AiThe US housing industry is facing a challenging year in 2025, with elevated mortgage rates and ever-rising home prices continuing to discourage potential homebuyers. According to Bankrate's latest national survey, the average rate on a 30-year mortgage was 7.08 percent as of January 8, 2025[1]. This, combined with limited housing inventory, is expected to keep the market under pressure.
Despite these challenges, there are signs of improvement. The National Association of Realtors (NAR) reported an increase in existing-home sales in November 2024, with home sales rising 4.8 percent year-over-year. This suggests that attitudes among buyers may be changing, with more entering the market as the economy continues to add jobs and housing inventory grows[1].
However, the lack of affordability and the continuation of the lock-in effect, where sellers are reluctant to sell due to high interest rates, will keep sellers on the sidelines, according to Selma Hepp, chief economist for CoreLogic[1]. The increase in inventory is expected to come primarily from new construction, as mortgage rates are not expected to fall enough to spur an increase in existing-home inventory[1].
Builder confidence in the market for newly built single-family homes was 47 in January, up one point from December, according to the NAHB/Wells Fargo Housing Market Index (HMI)[3]. However, sales expectations in the next six months fell six points to 60, partly due to the elevated interest rate environment.
In response to these challenges, builders are cutting home prices and using sales incentives. The latest HMI survey revealed that 30% of builders cut home prices in January, with an average price reduction of 5%[3]. The use of sales incentives was 61% in January, a share that has remained stable since last June.
The start of 2025 has been slow, with more available homes but less demand, according to Steven Thomas of Reports on Housing[4]. High mortgage rates and rising home prices are the main factors contributing to this slowdown.
In conclusion, the US housing industry is facing a tough year in 2025, with elevated mortgage rates and limited housing inventory expected to keep the market under pressure. However, there are signs of improvement, with an increase in existing-home sales and a rise in builder confidence. Builders are responding to these challenges by cutting home prices and using sales incentives. The industry will need to continue to adapt to these changing conditions to navigate the challenges ahead.
This content was created in partnership and with the help of Artificial Intelligence AI
Despite these challenges, there are signs of improvement. The National Association of Realtors (NAR) reported an increase in existing-home sales in November 2024, with home sales rising 4.8 percent year-over-year. This suggests that attitudes among buyers may be changing, with more entering the market as the economy continues to add jobs and housing inventory grows[1].
However, the lack of affordability and the continuation of the lock-in effect, where sellers are reluctant to sell due to high interest rates, will keep sellers on the sidelines, according to Selma Hepp, chief economist for CoreLogic[1]. The increase in inventory is expected to come primarily from new construction, as mortgage rates are not expected to fall enough to spur an increase in existing-home inventory[1].
Builder confidence in the market for newly built single-family homes was 47 in January, up one point from December, according to the NAHB/Wells Fargo Housing Market Index (HMI)[3]. However, sales expectations in the next six months fell six points to 60, partly due to the elevated interest rate environment.
In response to these challenges, builders are cutting home prices and using sales incentives. The latest HMI survey revealed that 30% of builders cut home prices in January, with an average price reduction of 5%[3]. The use of sales incentives was 61% in January, a share that has remained stable since last June.
The start of 2025 has been slow, with more available homes but less demand, according to Steven Thomas of Reports on Housing[4]. High mortgage rates and rising home prices are the main factors contributing to this slowdown.
In conclusion, the US housing industry is facing a tough year in 2025, with elevated mortgage rates and limited housing inventory expected to keep the market under pressure. However, there are signs of improvement, with an increase in existing-home sales and a rise in builder confidence. Builders are responding to these challenges by cutting home prices and using sales incentives. The industry will need to continue to adapt to these changing conditions to navigate the challenges ahead.
This content was created in partnership and with the help of Artificial Intelligence AI