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Altos Founder Mike Simonsen on the latest housing market trends
Feb 3, 2025
This week features Mike Simonsen, Founder of Altos Research, a leading source for housing market data. He shares an intriguing 2025 forecast predicting a slight increase in home sales and prices, yet highlights persistent affordability challenges. Simonsen also discusses the pivotal role of immigrant labor in the construction industry and how tariffs might spike building costs. With a possible dip in mortgage rates on the horizon, the conversation reveals the complex dynamics shaping today’s housing market.
31:49
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Quick takeaways
- Home sales are expected to rise slightly to 4.2 million by 2025, facing challenges from fluctuating mortgage rates and affordability issues.
- The reliance on immigrant labor in construction and potential tariffs on materials could significantly impact housing market dynamics and affordability.
Deep dives
Forecast for Home Sales in 2025
Home sales are expected to grow modestly by 5% in 2025, increasing from about 4 million to 4.2 million transactions. The market has experienced a significant drop in home sales from 6 million annually to 4 million due to rising rates that have persisted since the pandemic. Although the forecast suggests growth, recent data indicates a 10% decrease in pending home sales compared to the previous year, raising concerns about whether the anticipated sales volume will materialize. Ongoing fluctuations in mortgage rates may necessitate a reevaluation of this growth forecast in the coming months.
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