Real Estate Rundown April 2025
April 01, 2025
Photo Courtesy of Masaaki Komori via Unsplash
Under Contract Data Increased in February
The real estate market showed signs of recovery in February after a slow January, with contract signings rising 2%, according to the National Association of REALTORS. The South led the rebound with a 6.2% increase, while the Midwest saw slight growth, and the West and Northeast experienced declines. Despite this improvement, contract signings remain below historical norms. NAR Chief Economist Lawrence Yun notes that moderately lower mortgage rates could help both demand and supply by improving affordability and easing the "lock-in effect" that keeps homeowners from selling. NAR projects mortgage rates to average 6.4% in 2025 and 6.1% in 2026, with home sales expected to rise as inventory grows. Existing-home sales are forecasted to increase 6% in 2025 and 11% in 2026, while new-home sales are expected to climb 10% in 2025 and 5% in 2026. Additionally, home prices are predicted to grow 3% in 2025 and 4% in 2026. Yun suggests that discussing rising home equity—with homeowners’ median net worth at $400,000 compared to renters’ $10,000—can motivate potential buyers.
Mortgage Rates Hold Steady
Mortgage rates remained relatively steady over the past week, hovering closer to recent lows seen in mid-December rather than the highs of mid-January. However, uncertainty continues to drive volatility, making it difficult to predict rate movements with confidence. Even minor economic data releases, which typically have little impact, now have the potential to influence mortgage rates as markets seek clarity on economic policies. Zillow forecasts mortgage rates to settle near the mid-6% range by the end of 2025, barring further economic softening. The recent dip in rates has already sparked increased mortgage and refinancing activity, potentially leading to an earlier-than-usual start to the home shopping season. Buyers face a key decision: enter the market early for a wider selection of homes or wait in hopes of securing better discounts. Zillow expects home price appreciation to remain positive but subdued in 2025, meaning buyers should focus on long-term suitability rather than short-term price gains, as appreciation may not offset selling costs in the near future.
Spring Market Provides More Listings
The spring home selling season is underway, bringing good news for buyers as increased listings provide more options and reduce the urgency to commit quickly. According to Realtor.com®, listing prices have stabilized while inventory continues to grow, offering buyers more choices than last year. The forecast predicts modestly higher home sales in 2025, thanks to steady mortgage rates—a contrast to last year’s volatility—which could encourage both buyers and sellers. Mortgage rates have hovered between 6.6% and 6.7% for the past three weeks, down from January's peak of over 7%, helping to push existing-home sales up in February, though sales remain below last year’s levels. In the rental market, rents have declined for the 19th consecutive month, though only slightly, due to a steady supply of new rentals. However, a construction slowdown in some cities, including New York City, Kansas City, and Washington, DC, could lead to renewed rental price pressures in those areas. Despite some economic uncertainty, buyers this spring are benefiting from more inventory, stable mortgage rates, and a more balanced market compared to last year.
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