BiggerPockets Daily
Where Home Prices Are Likely to Go This Year
Jan 31, 2025
Home prices are showing weakness with one in three listings seeing price cuts. This could signal a broader market correction. Altos Research data reveals why sellers are lowering prices and highlights growing inventory. The impact of high mortgage rates and sluggish sales is examined, alongside a glimpse at future affordability in 2025. Plus, there's a focus on the surprising positive aspect within the market as experts analyze shifting trends and the potential for improvement in the coming months.
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Quick takeaways
- Home prices are declining as one in three listings face price cuts, indicating a potential market correction amid high mortgage rates.
- Despite current housing market challenges, low foreclosure rates and a significant single-family home deficit suggest a housing crash is unlikely.
Deep dives
Current Trends in Home Prices
Recent data indicates that a significant portion of homes on the market, approximately one in three, have experienced price cuts, reflecting a shift in the housing landscape. This marks the first year-over-year price decline since early 2023, suggesting that home prices may remain suppressed as the market transitions into spring. The affordability crisis that has plagued the housing market for several years has evolved, influenced by factors such as historic housing shortages, high mortgage rates, and shifting demand dynamics. Areas like Austin have seen notable price corrections, which indicate a necessary realignment between supply and demand, attracting attention from potential investors despite the challenges.
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