
the staff of the Ridgewood blog
Ridgewood NJ, as we move into 2025, the real estate market is expected to bring stability in mortgage rates, a modest increase in housing inventory, and slower home price growth. Here’s a breakdown of the latest forecasts and expert insights on what homebuyers and sellers can anticipate in the coming year.
Stable Mortgage Rates in 2025
Mortgage rates, a critical factor for homebuyers, are expected to stabilize in 2025 after a volatile 2024. The Federal Reserve’s recent rate cuts, which brought its benchmark rate from 5.25%–5.50% to 4.25%–4.50%, aim to provide relief for consumers, including prospective homebuyers.
Throughout 2024, 30-year fixed mortgage rates fluctuated between 6% and mid-7%. In 2025, experts expect rates to hover around similar levels, with some variation.
Greg McBride, Chief Financial Analyst at Bankrate, predicts continued volatility:
“We’ll likely see mortgage rates touching 7% again and also dipping slightly below 6%.”
Realtor.com’s 2025 Housing Forecast predicts an average mortgage rate of 6.3% for a 30-year fixed loan. While these rates may not drop significantly, they offer stability for buyers planning their next steps.
Housing Inventory to Increase
Good news for buyers: housing inventory is expected to rise in 2025, although not drastically.
- Realtor.com Forecast: 11.7% increase in existing homes for sale.
- National Association of Realtors (NAR): 9% increase in existing inventory and 11% increase in new homes.
Rob Norman, Eastern Region President of Coldwell Banker Realty, believes many homeowners with lower mortgage rates will begin to reenter the market, contributing to the increase in listings:
“I don’t think we’re going to see a flood of inventory, but I do see the inventory coming up to a healthy rate.”
This gradual rise will provide more options for buyers, though homes may take longer to sell, according to McBride.
Modest Growth in Home Prices
Home prices are expected to continue rising in 2025, but at a slower pace compared to previous years.
- Realtor.com Prediction: 3.7% increase in home prices.
- NAR Projection: 2% increase in home prices.
McBride emphasizes that rising costs associated with homeownership will limit how quickly prices can climb:
“Homes can only sell for what consumers are able to pay.”
If inventory levels increase as expected, the upward pressure on home prices will ease, creating a more balanced market.
Expert Advice for Buyers in 2025
For those considering buying a home, experts recommend entering the market sooner rather than later. Rob Norman advises:
“Don’t wait. History has not fared well for those who waited. Buy a home, get into the market, and benefit from home appreciation.”
Real estate remains a solid long-term investment, and with stable mortgage rates and growing inventory, 2025 may offer a prime opportunity to secure a property.
Key Takeaways for the 2025 Real Estate Market
- Mortgage Rates: Expect stability with average rates around 6.3%.
- Housing Inventory: A modest increase will provide more options for buyers.
- Home Prices: Prices will rise but at a slower pace compared to 2024.
- Buyer Strategy: If you can afford to buy, it’s wise to enter the market now to reap the benefits of long-term appreciation.
As we step into 2025, the real estate market appears poised for steadiness, offering opportunities for both buyers and sellers to make informed decisions.
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