Decoding the 2025 Housing Market with Bill McBride

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Jan 15, 2025

Bill McBride, a housing market expert and author of the influential blog Calculated Risk, discusses the future of the housing market. He predicts 'seven years of purgatory' due to high mortgage rates, which are expected to stay above 6%. Bill emphasizes the importance of inventory over sales numbers for understanding market dynamics. He explores demographic shifts, the impact of rising wages, and the ongoing affordability crisis. Additionally, he shares insights on the housing landscape as we approach 2025 and the potential outcomes for home prices.

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INSIGHT

Seven Years of Purgatory

The US housing market faces “seven years of purgatory” because there won't be many distressed sales.
Prices won't decline significantly, but they also won't rise much, potentially less than inflation.

INSIGHT

Focus on Inventory

Bill McBride focuses on inventory rather than sales data to understand the housing market.
Inventory is easier to track and provides earlier signals of market shifts, like in 2005 and 2012.

INSIGHT

Inventory vs. Sales in Supply-Constrained Markets

Sales numbers can't accurately reflect housing demand in a supply-constrained market.
For much of the 2010s, limited inventory restricted sales, even with strong demand, making inventory a better indicator.

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In this episode of the Top of Mind podcast, Mike Simonsen sits down with Bill McBride from Calculated Risk to talk about what to expect in the housing market in 2025 and beyond.

About Bill McBride

Bill McBride is a housing market expert and the author of the popular economics blog and newsletter “Calculated Risk”, which Nobel laureate economists have cited as a “go-to website for housing matters.” Bill may be best known for accurately predicting the housing bubble in 2005, and the bottom in housing prices in early 2012.

Here’s a glimpse of what you’ll learn:

Why the US housing market faces “seven years of purgatory”
Why inventory is more important than sales numbers for understanding the housing market
The market stat that Bill is watching this year and what it tells us to expect
Why mortgage rates will be stuck above 6% for a while
What’s on the horizon for recessions, inflation, and employment in 2025 and what it all means for the real estate market
How to measure home prices and what to expect for 2025
Why investors are less impactful in 2025 than they were a few years ago
How to spot a brewing financial crisis
The longer-term impact of changing demographics
How to view the affordability crisis and what’s likely to happen
A look at the 2030 housing market

Resources mentioned in this episode:

Featuring Mike Simonsen, President of Altos Research

A true data geek, Mike founded Altos Research in 2006 to bring data and insight on the U.S. housing market to those who need it most. The company now serves the largest Wall Street investment firms, banks, and tens of thousands of real estate professionals around the country. Mike's insights on the market have been featured in Forbes, New York Times, Bloomberg, Dallas Morning News, Seattle PI, and many other national media outlets.

About Altos Research

The Top of Mind Podcast is produced by Altos Research.

Each week, Altos tracks every home for sale in the country - all the pricing, and all the changes in pricing - and synthesizes those analytics to make them available before becoming visible through traditional channels.

Schedule a demo to see Altos in action. You can also get a copy of our free eBook: How To Use Market Data to Build Your Real Estate Business.

The Top of Mind podcast features top real estate industry insiders and experts to unpack the most important housing, real estate, mortgage data and trends that are shaping the housing market. Hosted by Altos founder Mike Simonsen and produced by the HousingWire Content Studio.

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