Zillow forecasts a gradual but bumpy decline
in rates, impacting sales and price growth
- Zillow's 2025 forecast expects only about 100,000 more sales
than in 2024.
- Home value growth nationwide is predicted to be low and slow:
2.2% over 2025.
- Inventory and new listings are trending in the right direction,
reducing pandemic-era deficits.
SEATTLE, Dec. 16,
2024 /PRNewswire/ -- Erratic and dramatic mortgage
rate movements that heavily influenced the housing market in 2024
are destined to play a major role in the coming year, according to
Zillow's latest market report1.
"There's a strong sense of déjà vu on tap for 2025. We are once
again expecting mortgage rates to get better gradually, and
opportunities for buyers should follow, but be prepared for plenty
of bumps on that path," said Zillow Chief Economist Skylar Olsen. "Those shopping this winter have
plenty of time to choose and a relatively strong position in
negotiations."
A forecast for slowly declining mortgage rates in 2025 spells
gradual growth for both sales and home price appreciation in
Zillow's outlook. A September dip in rates gave a second-half
tailwind to this year's home sales2 — Zillow expects
4.06 million sales for 2024. That number should rise slightly to
4.16 million in 2025. Home values are forecast to tick up 2.2% over
the course of 2025, right in line with the 2.3% annual appreciation
observed in November.
Recent and unpredictable drops in mortgage rates further
impress the need for buyers to be ready to move when opportunity
arises. Zillow's new BuyAbilitySM tool uses current
daily mortgage rates to determine a home budget that is affordable
for individual users, based on their unique financial
situation.
After the ups and downs of the past five years, many measures of
the housing market are trending closer to historical norms. The
flow of new listings to the market is still nearly 14% lower than
it was before the pandemic, but that's great progress over March's
25% deficit.
Total for-sale inventory is similarly clawing its way out of a
deep hole that developed early in the pandemic. It's now about 26%
below the norms of 2018–2019, the smallest shortfall seen since
September 2020. Both of these should
continue to improve next year, but again, progress will depend
heavily on what happens with rates.
Shoppers looking for homes during the slower winter months may
have an opportunity to snag a deal in a market that's becoming
increasingly buyer-friendly. Zillow's market heat index shows
competition for homes cooled nationwide and in 36 of 50 major U.S.
metro areas from October to November.
While the number of options available to shoppers today are
lower than they will likely see in the spring, there's also less
competition in the field. The share of homes that sold for more
than list price was below 28% in October (the latest data
available), continuing a downward trend that began in July.
Compared to the spring rush, buyers today should have an easier
time negotiating from a position of safety, with a greater chance
to buy contingent on inspections or repairs and a lesser chance of
being drawn into a bidding war.
|
Metro
Area*
|
Zillow Home
Value Index
(ZHVI)
|
ZHVI
Change,
Year over
Year (YoY)
|
Share of
Listings Sold
Over Asking
Price
(October)
|
Inventory
Change
Since Before
the
Pandemic
|
New Listings
Change Since
Before the
Pandemic
|
Median
Days to
Pending
|
|
United
States
|
$358,761
|
2.3 %
|
27.8 %
|
-26.3 %
|
-13.5 %
|
28
|
|
New York, NY
|
$680,934
|
7.0 %
|
51.3 %
|
-54.6 %
|
-35.4 %
|
32
|
|
Los Angeles,
CA
|
$956,130
|
4.5 %
|
44.1 %
|
-27.7 %
|
-27.0 %
|
24
|
|
Chicago, IL
|
$323,596
|
5.0 %
|
34.7 %
|
-47.7 %
|
-10.1 %
|
19
|
|
Dallas, TX
|
$368,995
|
-0.5 %
|
16.8 %
|
-1.3 %
|
-12.3 %
|
36
|
|
Houston, TX
|
$306,412
|
0.4 %
|
14.8 %
|
-3.0 %
|
-3.2 %
|
39
|
|
Washington,
DC
|
$570,857
|
4.1 %
|
40.7 %
|
-39.4 %
|
-18.0 %
|
16
|
|
Philadelphia,
PA
|
$364,488
|
4.5 %
|
39.9 %
|
-44.2 %
|
-12.7 %
|
14
|
|
Miami, FL
|
$485,481
|
1.4 %
|
8.9 %
|
-7.4 %
|
-8.4 %
|
53
|
|
Atlanta, GA
|
$379,029
|
0.6 %
|
19.3 %
|
-5.8 %
|
-20.4 %
|
42
|
|
Boston, MA
|
$697,983
|
4.6 %
|
51.2 %
|
-43.7 %
|
-29.0 %
|
14
|
|
Phoenix, AZ
|
$454,180
|
-0.4 %
|
16.7 %
|
-12.5 %
|
-18.2 %
|
33
|
|
San Francisco,
CA
|
$1,145,082
|
2.0 %
|
59.7 %
|
-8.6 %
|
-27.1 %
|
24
|
|
Riverside,
CA
|
$585,948
|
3.4 %
|
40.9 %
|
-26.5 %
|
-25.5 %
|
30
|
|
Detroit, MI
|
$249,644
|
4.1 %
|
37.1 %
|
-34.6 %
|
-9.9 %
|
17
|
|
Seattle, WA
|
$741,380
|
4.7 %
|
33.0 %
|
-24.1 %
|
-31.0 %
|
24
|
|
Minneapolis,
MN
|
$371,593
|
1.7 %
|
34.2 %
|
-27.7 %
|
-17.9 %
|
34
|
|
San Diego,
CA
|
$941,878
|
3.9 %
|
36.3 %
|
-32.7 %
|
-30.5 %
|
26
|
|
Tampa, FL
|
$370,924
|
-1.9 %
|
14.3 %
|
5.8 %
|
-5.8 %
|
36
|
|
Denver, CO
|
$582,285
|
0.7 %
|
23.1 %
|
3.1 %
|
-33.5 %
|
37
|
|
Baltimore,
MD
|
$387,856
|
3.1 %
|
42.2 %
|
-45.9 %
|
-12.5 %
|
15
|
|
St. Louis,
MO
|
$251,699
|
3.6 %
|
40.7 %
|
-43.7 %
|
-5.7 %
|
11
|
|
Orlando, FL
|
$392,046
|
0.0 %
|
11.6 %
|
13.8 %
|
-10.8 %
|
40
|
|
Charlotte,
NC
|
$378,269
|
1.5 %
|
19.2 %
|
11.3 %
|
-3.9 %
|
30
|
|
San Antonio,
TX
|
$280,313
|
-2.4 %
|
13.5 %
|
21.1 %
|
-4.7 %
|
55
|
|
Portland, OR
|
$547,284
|
1.4 %
|
31.6 %
|
-21.0 %
|
-31.8 %
|
33
|
|
Sacramento,
CA
|
$580,298
|
1.9 %
|
37.3 %
|
-28.0 %
|
-25.8 %
|
24
|
|
Pittsburgh,
PA
|
$209,632
|
2.3 %
|
25.9 %
|
-31.9 %
|
-5.1 %
|
22
|
|
Cincinnati,
OH
|
$283,491
|
4.0 %
|
28.5 %
|
-33.2 %
|
-9.9 %
|
11
|
|
Austin, TX
|
$443,995
|
-3.4 %
|
10.4 %
|
29.9 %
|
-21.9 %
|
71
|
|
Las Vegas,
NV
|
$431,058
|
5.2 %
|
19.0 %
|
-20.6 %
|
-24.5 %
|
33
|
|
Kansas City,
MO
|
$301,202
|
3.2 %
|
30.9 %
|
-35.1 %
|
-17.8 %
|
16
|
|
Columbus, OH
|
$312,283
|
3.3 %
|
32.8 %
|
-22.8 %
|
-11.7 %
|
13
|
|
Indianapolis,
IN
|
$277,058
|
3.0 %
|
19.9 %
|
-15.7 %
|
-5.8 %
|
21
|
|
Cleveland,
OH
|
$229,803
|
5.9 %
|
37.8 %
|
-51.5 %
|
-11.9 %
|
13
|
|
San Jose, CA
|
$1,608,753
|
7.5 %
|
68.2 %
|
-32.3 %
|
-25.6 %
|
19
|
|
Nashville,
TN
|
$437,563
|
1.3 %
|
15.2 %
|
-10.1 %
|
-13.3 %
|
35
|
|
Virginia Beach,
VA
|
$350,407
|
4.4 %
|
33.0 %
|
-44.3 %
|
-10.4 %
|
31
|
|
Providence,
RI
|
$486,878
|
6.7 %
|
48.6 %
|
-59.5 %
|
-25.2 %
|
16
|
|
Jacksonville,
FL
|
$353,661
|
-0.7 %
|
12.9 %
|
11.4 %
|
-5.2 %
|
56
|
|
Milwaukee,
WI
|
$346,019
|
4.8 %
|
45.2 %
|
-23.5 %
|
10.2 %
|
31
|
|
Oklahoma City,
OK
|
$231,671
|
2.1 %
|
22.2 %
|
-5.0 %
|
0.8 %
|
33
|
|
Raleigh, NC
|
$441,641
|
0.9 %
|
24.4 %
|
-12.2 %
|
-26.2 %
|
26
|
|
Memphis, TN
|
$234,485
|
0.9 %
|
16.7 %
|
0.4 %
|
-9.8 %
|
29
|
|
Richmond, VA
|
$370,344
|
4.1 %
|
41.9 %
|
-39.2 %
|
-14.8 %
|
14
|
|
Louisville,
KY
|
$257,372
|
3.9 %
|
25.3 %
|
-29.5 %
|
-11.3 %
|
18
|
|
New Orleans,
LA
|
$236,681
|
-1.9 %
|
13.3 %
|
57.4 %
|
22.6 %
|
47
|
|
Salt Lake City,
UT
|
$547,671
|
2.1 %
|
28.4 %
|
-13.3 %
|
-30.5 %
|
28
|
|
Hartford, CT
|
$365,001
|
6.7 %
|
63.5 %
|
-66.0 %
|
-15.9 %
|
9
|
|
Buffalo, NY
|
$261,680
|
5.2 %
|
67.2 %
|
-44.7 %
|
-12.4 %
|
16
|
|
Birmingham,
AL
|
$248,369
|
0.2 %
|
23.4 %
|
-17.2 %
|
-2.4 %
|
27
|
|
*Table ordered by
market size
|
1 The Zillow® market report is a monthly
overview of the national and local real estate markets. The report
is compiled by Zillow Research. For more information, visit
zillow.com/research.
2 National Association of Realtors existing home
sales, not seasonally adjusted.
About Zillow Group:
Zillow Group, Inc. (Nasdaq: Z and
ZG) is reimagining real estate to make home a reality for more and
more people. As the most visited real estate website in
the United States, Zillow and its
affiliates help people find and get the home they want by
connecting them with digital solutions, dedicated partners and
agents, and easier buying, selling, financing, and renting
experiences.
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All marks herein are owned by MFTB Holdco, Inc., a Zillow
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#10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a
Zillow affiliate.
(ZFIN)
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SOURCE Zillow