2025 Housing Market

If you’ve been waiting for the right time to buy or sell, 2025 might just be your year. According to Lawrence Yun, Chief Economist of the National Association of REALTORS®, the real estate market is set for an upswing, and the latest economic trends point to a more stable and optimistic future for homeowners, buyers, and industry professionals alike.

A Market Rebound is on the Horizon

After the challenges of 2023 and 2024—marked by the slowest home sales in nearly 30 years—the market is showing clear signs of recovery. The momentum began in the latter half of 2024, with an increase in inventory and more favorable conditions for buyers. Now, as we move into 2025, existing home sales are expected to increase by 7% to 12%, with further growth projected in 2026.

This positive shift is fueled by a combination of factors:

• Steadying Home Prices: The national median home sale price is forecasted to hit $410,700 in 2025 and $420,000 in 2026, reflecting modest but healthy growth of around 2% year-over-year.
• Stabilizing Interest Rates: The Federal Reserve’s recent moves have helped contain inflation, and long-term mortgage rates are expected to hover in the 6% range. While rates won’t return to the ultra-low 4%-5% range seen in the past, they will remain more predictable.
• Stronger Employment Growth: With 2 million job gains projected for both 2025 and 2026, household incomes are on the rise, further supporting home affordability.

A Shift Toward Stability

One of the biggest concerns for buyers in recent years has been affordability, but the tides are turning. Inflation has been a major challenge, but the Federal Reserve’s policies are beginning to take effect. Rental price growth has slowed significantly, which is another indicator that affordability is improving.

Additionally, with more inventory hitting the market, buyers will have greater choices, easing the bidding wars and extreme price hikes seen in past years.

Potential Wild Cards: What to Watch For

While the overall outlook is positive, there are some factors that could influence the market’s trajectory:

• Government Spending & Policy Changes: There is speculation about whether government leaders like Elon Musk and Vivek Ramaswamy will take steps to curb federal spending. If spending is reduced meaningfully, mortgage rates could dip into the mid-5% range, making homebuying even more attractive.
• Fannie Mae & Freddie Mac Reform: The new administration may push for privatization, though such a move is unlikely. Keeping government-backed loan programs intact ensures affordability for FHA and VA borrowers.
• National Debt & Economic Growth: With the national debt now at $36 trillion, economic policies could play a key role in determining whether mortgage rates see further declines.

What This Means for Sarasota & Manatee County

As a luxury real estate advisor in Sarasota, I’m already seeing these trends take shape locally. New construction communities are ramping up, and buyers who had been on the fence due to high interest rates are now reentering the market. In our area, the demand for coastal properties remains strong, but with more balanced price appreciation, buyers have more opportunities to find the right home.

For sellers, pricing strategy will be key—homes that are priced correctly will attract serious buyers, while overpriced listings may linger. If you’re considering selling, now is the time to start preparing your home for the spring and summer markets when activity is expected to pick up.

Final Thoughts

The real estate market is entering a new phase—one of stability and opportunity. Whether you’re looking to buy, sell, or invest, the next two years present promising conditions.

If you have questions about how these market shifts impact your real estate plans, let’s chat! Call or text me at (941) 549-4010, and let’s make 2025 the year you achieve your real estate goals.

Forest Balderson is a Realtor with Suncoast Luxury Team at Coldwell Banker Global Luxury in downtown Sarasota. He is also President of the Gulf Gate Community Association. Forest.Balderson@cbrealty.com