Genevieve’s 2025 Market Forecast

If you read my fall 2024 market update, I talked a lot about how presidential elections can impact the housing market regardless of the candidate elected. The data shows that, once the election uncertainty is over, there is a high probability of a boost in home sales in the year following a presidential election. Nine out of the last eleven elections followed this pattern. So, who’s ready for 2025 and what can we expect to see here in Charlotte?

Home Sales to Rise

Lawrence Yun, the Chief Economist of the National Association of REALTORS®, predicts 2025 home sales to rise by 9%. Plus, he says they will continue to rise to 13% in 2026.

While these favorable numbers are part of his nationwide forecast, we all know that real estate is highly localized. In Charlotte, we are in a more buyer-challenged market compared to many cities due to Charlotte’s rapid population growth. We lack the inventory to support buyer demand so our home sales growth will be dictated more by available inventory than in other markets.

Mortgage Rates to Moderate

Mortgage rates had a significant bearing on last year’s real estate market. Public sentiment showed that the 6% and 7% interest rates we experienced in 2024 felt like a challenging barrier for first-time buyers, while existing homeowners felt stuck in place in order to hold onto their low 2% and 3% interest rates. It’s undeniable that rates will continue to affect the market in 2025. While interest rates are expected to moderate, we likely will not see the 4% many were hoping this year would bring. The large budget deficit prevents mortgage money from being readily available. Factors that could change this include a decrease in the budget deficit, a relaxation of housing regulations that are currently impeding new home builders, or a substantial rise in the labor force. All of which could contribute to alleviating inflationary pressures.

Home Prices to Continue Climbing

With the rise of home sales comes the continued climb of home prices. Again, it largely comes down to inventory. Greater buyer demand than available housing supply means competition, which drives up pricing and impacts overall housing affordability. Current homeowners are enjoying record-breaking equity gains and the net worth gap between homeowners and renters continues to widen. Charlotte needs more new home build starts to help supply the market and keep pricing stable.

New Buyers to Emerge

The composition of home buyers is evolving as we move into 2025. Cash buyers are at an all-time high both nationally and in Charlotte due, in part, to equity gains. One-third of all repeat buyers paid cash for their most recent purchase. Another emerging buyer trend is multi-generation purchases where family members pool their money together on a single property. First-time buyers are getting older. The average age of a first-time buyer is now 38 years old. And single female buyers are now outpacing single men. You go girls!

In 2025, we anticipate that significant life events will serve as the catalyst for many real estate transactions. This year, we will see the birth of 3.5 million infants in the U.S., as well as 1.5 million marriages, 700,000 divorces, 3.5 million individuals hitting retirement age (65), and 25 million job transitions. So, while there is no way to perfectly time the market, these life changes may be the perfect reason to consider a move.

The 2025 housing market has pros and cons, as it does every year. In Charlotte, we will see a familiar story of tight inventory, rising prices, and stiff buyer competition this spring. Our hope that is that easing interest rates encourages more sellers to list their home, which would bring some of the added inventory we really need.

My team and I have been navigating this style market in Charlotte for years. We can help you through its challenges and take managing the process of your plate. We are here to help anytime. Give us a call.

— Genevieve