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Will Housing Market Boom in 2025? Rates Hold Key to Growth

HomeWill Housing Market Boom in 2025? Rates Hold Key to Growth

Will Housing Market Boom in 2025? Rates Hold Key to Growth

Will Housing Market Boom in 2025? Rates Hold Key to Growth

US Existing Home Sales See 3.4% Year-Over-Year Growth in October, Exceeding 3.96 Million Units

In a recent development that could signal a positive trend for the US housing market, existing home sales have increased by 3.4% year-over-year in October, reaching an impressive 3.96 million units. HousingWire Lead Analyst Logan Mohtashami has provided valuable insights into the current state of the housing market dynamics on Wealth.

Market Dynamics and Interest Rates

Let's be realistic, last year at this time, mortgage rates rose to as high as 8%, and sales plummeted even further. However, this time around, we have a relatively low bar for demonstrating year-over-year growth. Mohtashami explains that the significant decrease in interest rates has contributed significantly to the improvement in sales figures.

However, he adds that there is still more work to be done before the housing market can truly flourish. According to Mohtashami, "the positive story for housing in 2024 [is] inventory was able to grow, we have more choices for everybody." He emphasizes that if mortgage rates were to decrease to around 6%, sales could increase even further.

Looking Ahead to 2025: The Role of Interest Rates

Mohtashami stresses that the expansion of the housing market in 2025 is heavily dependent on lower interest rates. Although he acknowledges that rates do not need to return to their historically low levels, ranging from 3 to 5%, to stimulate sales activity.

Mortgage Reports Continue to Climb

Freddie Mac has reported that mortgage reports have climbed for an eighth consecutive week, indicating a sustained upward trend in the market. This news is likely to provide further optimism for potential homebuyers and sellers alike.

Expert Insights on Wealth

To stay up-to-date with the latest expert insights and analysis on the housing market, viewers can check out more Wealth content for in-depth coverage and analysis of the current market trends.

Key Takeaways

  • Existing home sales have increased by 3.4% year-over-year in October.
  • Sales reached an impressive 3.96 million units.
  • Housing market expansion hinges on lower interest rates.
  • Inventory growth has provided more choices for homebuyers.
  • Lower mortgage rates could lead to increased sales activity.

Conclusion

The recent increase in existing home sales is a promising sign for the US housing market. With inventory levels increasing and interest rates decreasing, potential homebuyers are likely to benefit from a more favorable market environment. As we move forward into 2025, it will be essential to monitor interest rate developments closely.