With the holiday season officially upon us, we’d be remiss if we didn’t take the opportunity to wish you a happy holiday season! As we enjoy the holiday festivities, we hope you, your family, and your loved ones are well.
Here at 5 Elements Real Estate Advisors, we are excited to launch into the winter housing market. Read on for featured properties, a year-in-review, and a 2025 outlook.
2024 Year-in-Review
Twenty-twenty-four was a pivotal year for the housing market marked by election uncertainty, natural disasters, and regulation shifts that undoubtedly shaped the market.
Realtor Commission Changes
One of the major changes that came out of 2024 occurred back in August when the National Association of Realtors (NAR) implemented new real estate commission rules that affect how agents are paid. The new rules are intended to provide more transparency for consumers. So, what changed?
- The longstanding structure had been for home sellers to disclose how much the seller will pay the buyer’s agent if the seller uses a listing brokerage.
- Now, sellers have the right to negotiate with the buyers how much they’re willing to cover of the buyer’s agent commission. This information must be disclosed in the sales contract.
- If what the sellers are willing to pay does not cover what the buyers are obligated to pay, the buyer will have to pay the outstanding balance to the agent at settlement.
- Buyers are also now required to have a signed Buyer Agent Representation Agreement before they can view any homes with an agent.
How might these changes affect home prices and affordability, especially for first-time buyers, in 2025?
These new changes may make buying more challenging for many buyers. Most sellers realize this challenge and are still willing to pay the buyer’s agent commission to maximize the pool of buyers.
What if buyers choose not to have an agent?
Based on recent surveys, this is very rare. Without a trusted agent, buyers will experience difficulty scheduling showings, writing contracts, and finding trusted and reputable loan officers. An experienced agent can guide them through the complicated homebuying process, especially in a competitive market.
Housing Market Takeaways
- Inventory remains low in 2024.
- New construction continues to sell thanks to enticing builder’s incentives for buyers.
- Existing home inventory remains low, driving multiple offers for media price-range homes in many neighborhoods.
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THE FULL YEAR-END REPORT
Before we tie a bow on 2024, read on to explore what’s next for the 2025 housing market.
What’s Next for the 2025 Housing Market?
The past two years have been challenging for many looking to buy or sell, with factors like elections, natural disasters, and policy shifts shaping the market. However, the tide may be turning. Could 2025 bring a more optimistic outlook for the housing market?
While the future is never certain, current data suggests a brighter year ahead. Based on NAR’s predictions and my insights from the NVAR Inspire24 Conference, here are key housing indicators to keep in mind for the year ahead.
Home Sales Projected to Rise
With improving job numbers and recent gains in the stock market, more Americans may be motivated to act. Lawrence Yun, chief economist of the National Association of REALTORS®, predicts an uptick of nearly 2 million jobs for 2025 and another nearly 2 million increase in 2026, which could bode well for the housing market.
Here’s Yun’s forecast for the next two years:
- 2025 sales projection: Existing home sales to rise 9% year-over-year. New home sales to jump by 11%.
- 2026 sales projection: Existing home sales to rise 13% year-over-year. New home sales to increase by 8%.
Loan Limit Increases
Exciting news from the Federal Housing Finance Agency (FHFA). The 2025 conforming loan limit is increasing, giving buyers more options and buying power. Here’s what you need to know:
- The new base loan limit is $806,500 (an increase of $39,950).
- In high-cost areas, the limit will be $1,209,750.
- Clients can borrow more without needing a jumbo loan.
See the below graphic for additional insight broken down by county.
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THE FULL YEAR-END REPORT
Reach out for a free, no-obligation consult at 703.677.0709 / [email protected].