On The Market
Weaker Home Prices Ahead | Zillow Downgrades 2025 Home Price Forecast
Feb 27, 2025
Orphe Divounguy, a Senior Economist at Zillow, shares critical insights into the housing market's shifting landscape. He discusses Zillow's downgraded home price forecast for 2025, attributing it to rising inventory and suppressed buyer demand due to high mortgage rates. The conversation delves into the impacts of multifamily construction on rent prices and explores whether the market has reached a supply-demand equilibrium. Divounguy also highlights potential factors that could reignite buyer demand in this stagnant environment.
31:51
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Quick takeaways
- Zillow's revised forecast indicates a significant downgrade in projected home price growth for 2025 due to increased inventory and suppressed buyer demand.
- Regional housing trends show that affordable areas are experiencing price growth, driven by strong local labor markets and economic opportunities.
Deep dives
Current Housing Market Trends
The housing market is experiencing a notable shift, characterized by an increase in the number of sellers compared to buyers. As winter typically sees a slowdown in housing activity, the recent uptick in sales signifies a positive trend for the upcoming home shopping season. Despite forecasts predicting home value growth to be weaker, there are hints of optimism as mortgage rates have recently declined, boosting buyer interest. This environment suggests a potential modest rebound in home sales, moving slightly above the drastic lows observed in 2024, based on a supportive combination of factors like increased inventory.
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