What to Expect from the 2025 Housing Market for Buyers or Sellers

By Arizona Home Group

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What can we expect from the housing market in 2025? Before we can move forward, it’s important to reflect on the trends that shaped the 2024 market. Even though last year was lackluster, there were some surprising developments in real estate.

Year-end closings. Throughout 2024, our market faced major challenges. Pending transactions were down, and market activity was slow. The year ended with 67,000 closings, which is the slowest rate we’ve seen since 2007. This number highlights the difficulties buyers and sellers are facing today.

Inventory trends and prediction. Heading into 2025, we see an increase in inventory. Year over year, inventory has risen by 37.5%, and we expect this trend to continue as we head into the spring selling season. Potentially, available homes will reach as many as 22,000 by February.

Pricing pressures for sellers. Because of this surge in inventory, we may see home prices go down. This is a concern for sellers who may find it harder to get their desired sale prices. For buyers, this is a good thing because they’ll have more options.

Days on market. Another factor that affects buyers is the increase in days on market. Homes are sitting longer, from an average of 60 days to 78 days, giving buyers more time to make decisions and potentially negotiate better deals.

Interest rates. Rates have been a major challenge in the housing market. They’ve recently climbed to 7.25%, which is frustrating for both buyers and sellers. Given the strong economy, low unemployment, and manageable inflation, the Federal Reserve is probably not going to lower rates anytime soon. So, higher rates may be the “new normal” until something significant happens.

Both buyers and sellers need to adjust to the changing market and stay updated on inventory and pricing trends to make smart choices.

We’re here to keep you informed about developments in real estate, so don’t hesitate to reach out to us if there’s something you’re curious about in the market. Contact us at (602) 571-3730 or AHGadmin@gmail.com. We look forward to sharing what 2025 has in store for the real estate market.