🏡 Key Highlights
-
Mortgage Rate Surge: Rapid increases in mortgage rates have significantly impacted the housing market.
-
Sales Projections: Existing home sales are expected to rise by 6% in 2025 and 11% in 2026.
-
New-Home Sales: Forecasted to increase by 10% in 2025 and 5% in 2026.
-
Median Home Prices: Projected to climb by 3% in 2025 and 4% in 2026.
-
Mortgage Rate Averages: Anticipated to average 6.4% in the latter half of 2025 and 6.1% in 2026.
During the “Residential Economic Issues & Trends Forum” at the 2025 REALTORS® Legislative Meetings, Lawrence Yun, Chief Economist at the National Association of REALTORS® (NAR), addressed the challenges facing the housing market. He emphasized that the swift rise in mortgage rates has been detrimental, particularly for new homebuyers facing increased monthly payments.
Yun noted that while existing homeowners benefit from previously locked-in low rates, potential buyers are deterred by higher borrowing costs. He stressed that mortgage rates are the “magic bullet” for market recovery, awaiting a decline to stimulate activity.
The Federal Reserve’s revised economic outlook, with a downgraded GDP growth forecast from 2.1% to 1.7% and an increased inflation projection to 2.7%, suggests a cautious approach to interest rate cuts. Yun highlighted that shelter costs remain a significant component of inflation, indicating that the Fed may delay rate reductions until inflation is fully controlled.
Despite current challenges, Yun remains optimistic, forecasting growth in both existing and new-home sales over the next two years, alongside moderate increases in median home prices.
For more detailed information, you can read the full article here: NAR Chief Economist Lawrence Yun Says Mortgage Rates’ Fast Rise Hurt Housing Market
