Home Sales May Dip Below 2024 Levels

AUSTIN – (By Dale King, Realty News Report) – Real estate professionals, mortgage brokers and house hunters welcomed 2025 with eager anticipation, hoping the arriving New Year would eradicate the woes built up from two years of weak market activity.

But Realtor.com’s newly released 2025 Forecast Update said those expectations may fall short of year-end actuality. “Home sales are expected to remain subdued in 2025,” the report says, “as persistent affordability challenges and mortgage rates that have stayed higher than anticipated continue to put pressure on the market. Home price growth is also projected to slow, reflecting a more balanced housing landscape.”

“With home sales expected to dip below 2024 levels, rising delistings and regional shifts complicate what was once expected to be a turning point for buyers,” the report adds.

“Even with more homes on the market, buyer response has remained muted compared to what we’d expect from similar supply shifts in the past,” said Danielle Hale, a chief economist at Realtor.com.

In areas like the South and West, inventory gains have been more substantial, she said. But affordability constrictions continue to stifle demand. At the same time, the Northeast and Midwest remain as tighter markets with comparatively steadier buyer activity.

Overall sales down

Home sales in 2025 are expected to total around four million, slightly below 2024’s historically low tally of 4.06 million — the slowest pace since 1995. “Our original forecast called for only a modest improvement, and year-to-date sales have slightly outperformed expectations, surpassing our projections by roughly 2 percent,” said Hale.

But sales have faltered in recent months, “once again lagging just behind the prior year’s pace, and we anticipate this to continue, on average, rather than to encounter a stronger second half sales uptick. As a result, we now expect that total existing-home sales for 2025 will end the year about 1.5% lower than in 2024.

Mortgage rates to moderate

Mortgage rates are expected to ease slowly for the remainder of 2025, stated the 2025 updated Realtor.com forecast, with an average rate of 6.7 percent prevailing for much of the year, reaching 6.4 percent as 2025 approaches its close.

This is a slight upward revision from an earlier Realtor.com prognosis. “After the 2024 election, mortgage rates shot up as investors anticipated a mix of greater economic growth, higher inflation and a larger deficit,” Hale said. “While the economy remains steady, growth is expected to slow, which has helped to soften the trend in mortgage rates.”

Home prices climb, growth slows

The lack of affordability continues to hover at or near long-term highs, says the report, and home prices have remained doggedly high in the face of a housing supply shortage that has plagued the U.S. real estate market for more than a decade.

“Our initial expectation was to see only modest slowing in home price growth in 2025; however, as 2025 has unfolded, home sales price growth has slowed even as listing price trends are mixed, with several metro areas showing listing price declines, particularly in the South and West where inventory is more fully recovered,” said Hale.

“As buyers are likely to have more for-sale options to choose from, we anticipate home sales prices will advance by an average of 2.5 percent across the calendar year nationwide this year, a step down from 2024 and our prior expectations.”

Sellers React

Sellers are reacting to the whims of the market – and not always positively. During the month that was studied, more than one in five listings had a price reduction as inventory climbed nearly 30 percent and time on market slowed, helping to underscore the expectation that the median home sales price was likely to follow.

At the same time, a rising number of homeowners opted instead to take their listing off the market without a sale in a move called a “delisting.” These delistings soared 47% in the 12-month period ending in May, offering evidence that some sellers would prefer to wait rather than meet the market where it was.

“If the recent rise in delistings continues or picks up pace, it could interrupt the more buyer-friendly momentum we’ve started to see,” Hale added. “Buyers should keep that in mind when making offers. While homes that have been on the market longer often signal sellers who are open to negotiation, that’s not always the case.”

Renting still attractive option

“With conditions evolving very gradually, our rental market outlook has not changed,” said Hale. “Buying a home is challenging and rents continue to ebb, dropping 2.1% over the last year.”

In June, rents notched a 23rd straight month of easing that brought the median asking rent down 2.7 percent from its August 2022 high. This translates into a monthly savings of nearly $50 for renters willing to continue waiting for their shot at the American dream.