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59 January 2025 J O U R N A L January 2025 ยป Belt states, such as Florida and Texas, as well as in portions of the Mountain West area and Pacific Northwest. On the other hand, compared to 2019, there are far fewer properties for sale in the Midwest and Northeast. Overall, it's estimated that inventory levels will continue to gradually in- crease across the country, with Sun Belt inventories continuing to be looser than those in the Northeast and Midwest. The Housing Market Will Contin- ue to See Growth in the Sales of New Homes (in Areas Where They Can Be Built) The year 2025 is projected to be another strong one for new home sales due to the ongoing shortage of available existing homes and the positive demo- graphic-based demand for housing. In 2024, through October, the average annualized sales pace of new home sales was an estimated 682,000, which is higher than the average sales pace of 595,000 from 2015 to 2019. Homebuild- ers are nevertheless eager to provide incentives, such as interest rate buy- downs, to move their inventory of new homes for sale and to switch to smaller, more affordable homes in the face of high mortgage rates. The median sales price of new homes has historically been significant- ly higher than the median sales price of older homes, although, in recent years, the difference has decreased. Between 2015 and 2019, the median price difference between the sale of a new and existing home averaged roughly 4%, whereas between 2015 and 2019, it averaged 28%. Sun Belt metro areas have a higher concentration of single-family homes. Although the geographic distribution of newly sold homes is not taken into account by this measure, the median square footage of new homes has decreased from a peak of 2,519 square feet in Q1 2015 to 2,158 square feet as of Q3 2024, contributing to the lower price premium. However, new home sales differ sig- nificantly by area. The majority of sales occur in the South and Mountain West, where regulations and land permit more construction. The metropolitan statisti- cal regions of Houston, Dallas, Phoenix, Atlanta, and Charlotte, North Carolina, accounted for 20% of the almost 750,000 single-family home permits issued so far this year through October. It's forecast that there will be a lot of homebuilding in the Sun Belt in 2025. The Overall Increase in Home Prices Nationwide Will Slow in the Coming Year Home price rises will continue to slow down into 2025, even if the per- sistent shortage of available homes has kept it strong. According to the Fannie Mae Home Price Index, they predict that home prices will increase by 3.6% in 2025 as opposed to 5.8% in 2024. A slow improvement in homeowner affordability conditions may begin in 2025 if home price appreciation softens, allowing nominal income growth to surpass home price increases for the first time since 2011. Mortgage rates will still be a barrier to affordability. However, there will probably be significant geographical variations. A divergent home price story is currently being driven by regional differences in for-sale inventory. Except for the Great Financial Crisis and Q3 2022, when home prices fell nationally, 75 of the FHFA top 100 metro areas saw positive seasonally adjusted quarter-over-quar- ter home price growth in both the second and third quarters of 2024. In comparison to the national average, areas with a larger stock of homes for sale will likely continue to see poorer home price dynamics in 2025. The Holding Pattern for Multifam- ily Housing Is Projected to Continue We anticipate that 2025 will resem- ble 2024 in the multifamily market. Below-average rent growth in the near term as more units are constructed is expected, even though longer-term de- mographic trends continue to support multifamily building over the next ten years as the prime renter-aged popula- tion is predicted to continue growing. The projections for rent growth in 2025 range from 2 to 2.5%, depending on the metric. Renter affordability will benefit from this since it will be the second year in a row that nominal salary growth has outpaced rent growth in several metro areas. However, given the persistently high longer-term borrowing rates, slower rent increases will result in fewer new development projects. Furthermore, a large portion of the geographical variance found in sin- gle-family building also exists in mul- tifamily construction: Following the epidemic, there was a building boom in several Sun Belt metro areas, and the increase in supply is inf luencing prospective homeowners' "buy-vs-rent" calculations. In many areas, renting is becoming more financially attractive than purchasing a home compared to several years ago, which means many would-be buyers are likely to decide to keep renting. GINNIE MAE HIGHLIGHTS FINANCIAL PERFORMANCE AND HOMEOWNERSHIP OPPORTUNITIES I n order to give more Americans significant opportunities to become homeowners, Ginnie Mae has re- leased its Fiscal Year 2024 (FY24) Annual Financial Report, which highlights its financial outcomes and demonstrates exceptional success in bolstering the U.S. housing financing sector. Some 1.2 million households coun- trywide, including servicemembers, veterans, and first-time homebuyers, were assisted by Ginnie Mae's mort- gage-backed securities (MBS) program during FY24.