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43 January 2025 J O U R N A L January 2025 ยป The top five metros with the biggest year-over-year (YoY) decreases in new listings are: 1. San Antonio (-19.8%) 2. Austin, Texas (-18.7%) 3. Portland, Oregon (-10.3) 4. Atlanta (-9.6%) 5. Newark, New Jersey (-8.3%) Note: The 50 most populated metro areas in the U.S. are included in Red- fin's metro-level data. To maintain the accuracy of the data, some metros may occasionally be excluded. MORE POTENTIAL HOMEBUYERS CHOOSING TO RENT G iven the pent-up demand, Redfin's economists predict more home sales in 2025. Due to rising housing prices and mortgage rates that are still close to 7%, some prospective homeowners will still be priced out, according to Redfin. According to Redfin, the median price of a home sold in the United States would increase gradually throughout 2025, finishing the year 4% higher than it did in 2024. Because there won't be enough new inventory to meet demand, prices will increase at a rate comparable to that of the second half of 2024. Many Americans will not be able to afford homeownership due to rising costs, which will force some pro- spective homeowners to rent instead. However, if the economy deterio- rates and/or if proposals for tax cuts and tariffs are retracted, mortgage rates may fall to the low-6% area. Any year that sees a transition in the president's office is unpredictable, but this one might be particularly so. 2025 Will See Higher Home Sales Than 2024 Existing home sales will increase slightly in 2025, reaching a yearly rate of 4.1 million to 4.4 million by the end of the year. That is an estimated 2% to 9% in- crease from the previous year. Although high housing costs may turn off some po- tential buyers, there is also a fair amount of pent-up demand in the market, which is why Redfin is showing an exceptional- ly wide sales range this year. As homeowners continue to hold onto their homes, poor inventory and high mortgage rates will be the cause of any slight improvement in sales. If mortgage rates drop more than anticipated and/or if the recent surge in demand for homebuying persists, sales might show a larger gain. Despite mortgage rates remaining at about 7%, demand for home purchases surged in the weeks following the November election. This was partially due to consumers waiting for uncertainty to subside before making a significant purchase, and also because the pros- pect of a Republican-led government gave many individuals greater financial confidence. Due in part to the fact that many Americans have been acclimated to high mortgage rates, Redfin's research even before the election indicated that rising mortgage rates did not dissuade purchasers as much as anticipated. Sales would increase if the economy continued to grow and enough indi- viduals could afford the high cost of housing in the upcoming year. Will 2025 Will Be a Renter's Market? Many Americans will either rent or continue to rent. Although purchasing a home will become more expensive, renting will become more affordable. According to Redfin, in 2025, the medi- an asking rent in the United States will not change from year to year. Because salaries would increase, the average American would be able to pay their rent more easily. Additionally, more rental units will be available for purchase, as many of the apartments that builders began construction on during the pandemic apartment boom are now complete. Because there will be more supply than demand, landlords will be compelled to make concessions to keep tenants, such as providing free parking, a free "Many Americans will not be able to afford homeownership due to rising costs, which will force some prospective homeowners to rent instead."