As the clock ticks toward 2025, real estate experts are predicting a rise in home sales and a stabilization of home prices across the United States in the new year, while also warning about the persistent affordability challenge.
Nationally, for 2025, NAR is forecasting 4.5 million existing home sales and a median existing-home price of $410,700.
However, NAR chief economist Lawrence Yun cautioned that housing affordability may still be an issue for first-time buyers.
“We do have a housing crisis in affordability for renters who would like to buy a property,” he said. “Americans are still not moving, which is keeping inventory lower and prices higher.”
There is still a significant disparity in net worth between homeowners and renters, with homeowners having an average net worth of $415,000 compared with just $10,000 for renters in 2024, according to the Federal Reserve’s Survey of Consumer Finances. “Both 2023 and 2024 have had historically low home sales,” Yun said.
Still, he said the “worst is over” and predicted existing home sales to increase from 7 percent to 12 percent in 2025 and 10–15 percent in 2026. New-construction home sales are expected to grow by 11 percent in 2025 and 8 percent in 2026. Nationally, the median sales price is expected to rise by 2 percent.
Jessica Lutz, NAR deputy chief economist and vice president of research, said high-income and high-equity homebuyers are winners in today’s market, with one in 10 purchasing a home with cash.
“Many first-time buyers are using their inheritance, or others are using their savings from the ‘bank of mom and dad,’” she said. “But the prices are shutting out lots of people.”
The new median age of the national first-time homebuyer has climbed to 38, and to 61 for repeat buyers.
“Forty years ago, most first-time buyers were in their early 20s,” Lutz said. Fifty percent of those buyers are married, and 25 percent are single women.
“We’re also seeing an all-time high of multigenerational buyers who are pooling their money to make a purchase,” she said.
Danielle Hale, chief economist at Realtor.com, also forecasted a hike in home sales for next year, but possibly at a lower rate of 1.5 percent.
“It could be a slow climb out of this current situation, and I believe home prices will continue to go up, but at a slower pace,” she said. “Income gains, easing mortgage rates, and new construction will help with affordability, and I do expect rents to stay flat.”
Yun also predicted that the Federal Reserve will cut interest rates another four to six times in 2025, and forecasted the average mortgage interest at just above 6 percent in 2025.
Jim Nabors, president of the National Association of Mortgage Bankers, agreed with Yun’s forecast.
“We anticipate the Fed to drop rates another three-quarters of a quarter during 2025 if inflation stays stable,” he told The Epoch Times. “If you look at mortgage rates over the past 40 years, with the exception of the early 1980s and 2021, the average 30-year fixed-rate mortgage was between 6 percent and 8 percent.”
Nabors noted that the housing market relies on more than just interest rates.
“The need for housing is still increasing as 10 million millennials will be looking for homes over the next few years,” he said.
“They are going to have to decide when they find a house they want—are they going to buy it now at whatever rates are available or sit on the sidelines waiting for rates to drop while house prices continue to rise?”
Top 2025 Housing Markets
Also on Dec. 12, NAR released its latest report on the 2025 Top 10 housing hot spots, which includes four in the South, three in the Midwest, two in the Northeast, and just one in the West.The Hartford-East Hartford-Middletown region of Connecticut and the Boston-Cambridge-Newton areas of Massachusetts and New Hampshire were named next year’s Northeast hot spots.
Jared Wilk, president of the Greater Boston Association of Realtors, told The Epoch Times that home prices remain high in Boston and its immediate suburbs, with a median single-family home price of $865,000.
“I’m optimistic about rates coming down in 2025, but fearful that affordability is going to continue to be a challenge for first-time buyers,” he said.
Wilk, a principal with the Shulkin Wilk Group at Compass in Wellesley, Massachusetts, noted that despite higher home prices, the region continues to be a major attraction because of its hospitals, universities, and technology companies.
“There’s a furious demand for homes here, and as a result, we don’t see the prices easing very much,” he said.
While new construction is more prevalent in the Boston suburbs, home prices still remain on the high end.
Many of Wilk’s clients are people moving within the region—some desiring a closer location to Boston for employment with others seeking the outskirts of the suburbs for more affordable options.
“We’re definitely seeing people pushing further north, west, and south of the city to places like Brookline, Newton, Concord, and Lexington,” he noted. “And most of these towns have their own character and a commuter rail line.”
Sheryl Bowden, president of the Phoenix Association of Realtors, told The Epoch Times that she wasn’t surprised to see that the Phoenix-Mesa-Chandler region of Arizona also made NAR’s list of Top 10 2025 markets. Plus, the area is more affordable than many Northeast locations, with a median single-family home price of $475,000.
“We’re in the Sun Belt, and people like to come here for change of scenery—either to buy second homes or to relocate,” she said. “We do have hot summers, but we never have hurricanes, tornadoes, or nasty winter weather.”
Bowden said inventory is beginning to pick up and that she expects more potential buyers to hit the market in January.
“We also have major employers like Google and Amazon, along with some great universities, medical schools, and sports teams—all of which are attracting people to the area,” Bowden said.
Many of her buyers are former Californians seeking more affordable housing options and often paying cash for homes. She also works with retirees moving from other parts of the country.
A 40-year real estate veteran, Bowden works with Realty Executives in Phoenix, but also serves the nearby communities of Scottsdale, Mesa, Tempe, and Chandler.
“We do see a lot of new construction in our area, but they’re not building it as fast as we’d like,” she said. “I think builders are becoming a bit more conservative now, constructing just a few homes to start before putting too much inventory out there.”
While prices are lower here than in much of the United States, Bowden said it’s still a struggle for first-time buyers.
“I have a son who’s 28 and a daughter who’s 25, and all of their friends want to buy homes but can’t afford it yet,” Bowden said.
“A lot of young people are living at home with their parents to try to save up for a down payment. Typically, your total household income should be at around $100,000 to be able to buy a home, but the majority of young people are not making that much.”
In nearby Scottsdale, the median price for a single-family home jumps to $1.1 million.
Other regions in NAR’s Top 10 2025 hot market list include Charlotte-Concord-Gastonia, North and South Carolina; Greenville-Anderson, South Carolina; Grand Rapids-Kentwood, Michigan; Indianapolis-Carmel-Anderson, Indiana; Kansas City, Missouri; Kansas City, Kansas; Knoxville, Tennessee; and San Antonio-New Braunfels, Texas.
